Nzdusd rises as mixed U.S. data contrasts with New Zealand’s inflation growth

NZDUSD Analysis

Performance after Thursday
Period	Pct	Chg	Momentum
Thursday	0.51%	30.3 Pips
Week to-date	2.44%	142 Pips
April	5.08%	288.2 Pips

Upcoming key events (London Time)

No major events for the day.

What happened lately

In the United States, the recent economic data reveal mixed signals about the economy’s performance. The initial unemployment claims have decreased from 223K to 215K, suggesting slightly improved labor market conditions. However, the U.S. Manufacturing Business Outlook Survey revealed a sharp decline from 12.5 points in March to -26.4 points in April, indicating a major contraction in manufacturing activity. This is concerning despite the increase in building permits which rose to 1.482 million in March from February’s revised 1.459 million, demonstrating some resilience within the housing sector. Housing starts, nevertheless, showed a decline to 1.324 million from 1.501 million, indicating a slowdown in new residential constructions. The retail data present a confusing picture; while retail sales, excluding automobiles, saw a decrease to 0.5% from 0.7%, the overall retail trade grew by 1.4%. However, the retail trade control group saw a reduction, declining from 1.3% to 0.4%, indicating variability across different retail sectors.

In New Zealand, the CPI inflation rate increased, with the first quarter showing a 0.9% growth over the previous quarter’s 0.5%. This suggests rising price pressures within the economy, possibly driven by demand or supply constraints. Annually, the inflation rate climbed to 2.5% from the previous year’s 2.2% in the first quarter, remaining within a moderate growth path.

The mixed U.S. economic indicators, particularly the decline in the manufacturing survey and housing starts, alongside the erratic retail performance, may weigh on the U.S. Dollar. In contrast, the rising inflation in New Zealand signals potential monetary policy adjustments, which could bolster the New Zealand Dollar. On Thursday, NZDUSD rose by 0.51% to 0.59621, reflecting these dynamics where stronger inflation data supports NZD against a potentially weakening USD, which struggles with mixed domestic economic outcomes. The absence of major upcoming events suggests subdued volatility, entailing that any new data or changes in market sentiment could heavily influence NZDUSD movements.

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What can we expect from NZDUSD today?

NZDUSD on Thursday rose 0.51% to 0.59621. Price is above 9-Day EMA while Stochastic is rising in overbought zone.

Updated daily direction for NZDUSD looks bullish as the pair ended higher after Thursday trading session.

Looking ahead for the day, immediate upside resistance level is R1 at 0.59936 with break above could target R2 at 0.60251 or figure level area. While towards the downside, we are looking at daily low of 0.58994 as an important support. Break below this level could weaken the current bullish momentum. A break above 0.59780 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 2.44% over the past few days.

Key levels to watch out:

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