Nzdusd dips as strong US home sales contrast with positive NZ trade data

NZDUSD Analysis

Performance after Wednesday
Period	Pct	Chg	Momentum
Wednesday	-0.25%	-14.7 Pips
Week to-date	0.26%	15.2 Pips
April	4.83%	274.2 Pips

Upcoming key events (London Time)

No major events for the day.

What happened lately

In March, the United States observed a significant upswing in new-home sales, marking a 7.4% increase from February’s modest rise of 1.8%. This notable growth points to a robust residential real estate market in the U.S., indicating strong consumer demand and potentially reflecting optimism in the economic outlook. This upward trend in new-home sales can also impact associated markets such as construction and materials, amplifying positive economic activities within the country.

Meanwhile, New Zealand’s export figures experienced a boost in March, ascending to $7.59 billion from $6.74 billion in February, as reported by Stats NZ. This surge reflects a positive trajectory for New Zealand’s trade dynamics and could be attributed to higher demand for New Zealand’s goods or an increase in production capabilities. Concurrently, the country’s 12-month trade balance improved slightly, narrowing to -6.13 billion NZD from -6.51 billion NZD the previous month. Furthermore, imports also saw a rise, reaching $6.62 billion from February’s revised $6.22 billion. These movements signal healthy international trade activity for New Zealand, suggesting a balanced growth pattern between exports and imports, potentially fortifying the country’s economic standing.

The recent macroeconomic data from the U.S. and New Zealand could have multifaceted impacts on the NZDUSD currency pair. The robust increase in U.S. new-home sales might strengthen the U.S. dollar, as it indicates a healthy economic environment and consumer confidence in America. On the other hand, the improvement in New Zealand’s trade statistics could lend support to the NZD by showcasing strength in national economic fundamentals, thanks to higher exports and a tightening trade balance. However, despite these positive indicators from New Zealand, the NZDUSD dropped by 0.25% to 0.59448 on Wednesday. This depreciation could reflect broader market tendencies or shifts in investor sentiment favoring the U.S. dollar over the Kiwi dollar, perhaps influenced by anticipated future economic or policy changes. In the absence of significant economic events scheduled for the day, market participants might closely monitor global cues and prevailing economic data for further direction in the currency pair’s movement.

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What can we expect from NZDUSD today?

NZDUSD on Wednesday dropped -0.25% to 0.59448. Price is above 9-Day EMA while Stochastic is falling.

Updated daily direction for NZDUSD looks bearish as the pair posted lower in Wednesday trading session.

Looking ahead for the day, immediate support level is at S1 0.59162 with break below could see further selling pressure towards S2 at 0.58876. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 0.60134 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 0.59362 would indicate selling pressure.

For the week to-date, take note that NZDUSD is mixed as compared to the prior week.

Key levels to watch out:

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