Sun, June 16, 2024

NZD at 0.6140 Amid Data Drought and Key Events

New Zealand Dollar fell against U.S. dollar. Euro stays low - NZD

Quick Look:

  • The NZD trades at 0.6140, an 11-week high, with thin momentum due to a data drought.
  • US GDP and PCE inflation data, NZ government Budget release, and RBNZ Governor Orr’s speech are pivotal.
  • US GDP and PCE updates could influence the Fed’s interest rate decisions, with markets eyeing potential rate cuts by September.

The NZD/USD currency pair trades at 0.6140, perched at an 11-week high. Despite reaching this level, the pair’s momentum remains thin due to a lack of significant data driving market movements. Several key events and data releases towards the end of the week could provide much-needed direction.

The market eagerly awaits the US GDP and PCE inflation prints, which are set to be released in the latter half of the week. These figures are critical as they could influence the Federal Reserve’s stance on future interest rate cuts. Additionally, the New Zealand government’s Budget release on Thursday and a speech by RBNZ Governor Orr on Friday are pivotal events that could sway the NZD/USD.

US GDP and PCE Inflation Data Crucial for NZD/USD

The upcoming US data, particularly the GDP and PCE Price Index inflation updates, will be crucial. The markets have shown heightened sensitivity to economic indicators that could hint at the Federal Reserve’s future policy moves. Investors are especially keen for any signs of potential rate cuts following an early week filled with appearances from various Fed officials. Currently, rate markets are pricing in even odds of a quarter-point rate trim by September, underscoring the prevailing uncertainty.

Technically, the NZD/USD pair has exhibited strength, closing positively for four consecutive weeks. A technical consolidation above the 200-day EMA at 0.6070 supports this upward momentum. Furthermore, the MACD signal lines running ahead of the bullish histogram bars indicate a potential reversal, suggesting that the pair might maintain its positive trajectory.

NZD/USD Targets: 0.6140 Resistance and 0.6070 Support

However, the pair faces negative pressure at the 0.6140 level. Breaching this level could signal a decline towards the 0.6070 support level. The EMA50 currently provides positive support, but the market is grappling with contradictory technical factors, leading to a neutral trend forecast in the short term.

Regarding price scenarios, a decline is expected if the 0.6140 level is broken, with the next target at 0.6070. Conversely, if the pair sustains trading above 0.6140, a positive scenario could unfold, targeting 0.6228. Analysts project the NZD/USD to trade between support at 0.6080 and resistance at 0.6180.

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