NZDUSD Analysis
| Performance after Wednesday | |||||
| Period | Pct | Chg | Momentum | ||
| Wednesday | 0.04% | 2.6 Pips |  |
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| Week to-date | 1.18% | 68 Pips |  |
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| March | 3.44% | 193.3 Pips | |
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Upcoming key events (London Time)
No major events for the day.
What happened lately
New Zealand’s economic growth showed a mixed picture in the fourth quarter. The country’s GDP rose significantly to 0.7% in Q4, rebounding from a revised contraction of -1.1% in Q3, as reported by Stats NZ. This quarterly growth indicates a recovery in the economy’s short-term activity. However, the annual GDP for New Zealand in Q4 fell to -1.1%, a decrease from the -0.3% reported in Q3. This annual decline suggests that while there was quarterly improvement, the economy still faces overall challenges on a yearly basis.
In the United States, the Federal Reserve’s interest rate projections present a cautious outlook. The first-year interest rate projection dropped to 3.4% from 3.9%, while the second-year projection fell to 3.1% from 3.4%, indicating an anticipated easing of monetary policy over the near term. Longer-term projections remained unchanged at 3%, suggesting stability in interest rate expectations beyond the short-term adjustments. Moreover, the Federal Funds Rate decision stayed steady at 4.5%, consistent with the previous rate, reflecting the Fed’s current stance on maintaining the existing monetary policy framework momentarily. These changes in interest rate projections highlight a more dovish approach by the Federal Reserve compared to its previous guidance, which may influence currency markets.
The mixed economic data from New Zealand and the changes in the U.S. interest rate projections could impact the NZDUSD exchange rate. The improvement in New Zealand’s quarterly GDP is a positive signal for the New Zealand dollar, as it suggests an economic recovery that might support currency strength. On the other hand, the decreased annual GDP highlights ongoing economic concerns that could limit the NZD’s appreciation potential. Meanwhile, the Fed’s revised interest rate projections suggest a dovish stance, potentially weakening the U.S. dollar. This environment might provide some support for the NZD against the USD. However, without significant upcoming economic events, the pair could continue in a consolidation phase, with minor appreciation in the NZDUSD observed as it rose 0.04% to 0.58170.
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What can we expect from NZDUSD today?
NZDUSD on Wednesday rose 0.04% to 0.58170. Price is above 9-Day EMA while Stochastic is rising.
Updated daily direction for NZDUSD looks mixed as the pair is likely to consolidate above 0.58137 (S1).
Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 0.58202 or trades above daily pivot 0.58169. Break above could target R1 at 0.58203. While to the downside, we are looking at 0.58137 (S1) and daily low of 0.58136 as support levels. NZDUSD need to break on either side to indicate a short-term bias. A break above 0.58202 may suggest continuation after recent positive movement.
For the week to-date, take note that NZDUSD is bullish as the pair continued to trade higher and is up by 1.18% over the past few days.
Key levels to watch out:
| R3 | 0.58269 |
| R2 | 0.58235 |
| R1 | 0.58203 |
| Daily Pivot | 0.58169 |
| S1 | 0.58137 |
| S2 | 0.58103 |
| S3 | 0.58071 |
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