By RoboForex Analytical Department
The NZD/USD pair continues its downward trend, dropping to 0.6240 in its third consecutive session of declines. This ongoing sell-off in the New Zealand dollar is driven by market expectations of an upcoming interest rate cut by the Reserve Bank of New Zealand (RBNZ). New Zealand’s borrowing costs are currently at 5.25% per annum, with widespread anticipation of a 50-basis point reduction at the next RBNZ meeting.
The RBNZ is known for its proactive and flexible monetary policy, which swiftly adjusts to inflationary pressures and external economic indicators. This expected rate cut responds to such factors and aligns with the bank’s strategy to manage economic growth and inflation.
Moreover, the NZD has been under additional pressure from a strengthening US dollar, bolstered by unexpectedly robust US employment statistics for September, reported by ADP. Although the ADP report does not directly correlate with the Nonfarm Payrolls (NFP) due shortly, it still shapes market expectations and sentiment.
Global risk appetite has also waned significantly due to escalating geopolitical tensions in the Middle East, further dampening the prospects for growth-sensitive currencies like the NZD.
NZD/USD technical analysis
Free Reports:
Get our Weekly Commitment of Traders Reports - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.
Sign Up for Our Stock Market Newsletter – Get updated on News, Charts & Rankings of Public Companies when you join our Stocks Newsletter
The NZD/USD pair followed a bearish pattern, confirming a downward wave to 0.6265 and a corrective rise to 0.6313. The market is now forming a new decline towards 0.6210. Once this target is reached, a corrective move to retest 0.6265 from below may occur, potentially leading to further declines towards 0.6144. This bearish NZD/USD outlook is supported by the MACD indicator, which, despite being above zero, shows a strong downward trajectory.
On the hourly chart, the pair is developing the third wave of its decline towards 0.6210. Following this, a corrective fourth wave up to 0.6260 is anticipated. This forecast aligns with the Stochastic oscillator readings, which indicate the signal line is below 50 and heading towards 20, suggesting a continuation of the downward momentum after a brief correction.
Disclaimer
Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.
- Riksbank and Banxico cut interest rates by 0.25%. BoE, Norges Bank, and PBoC left rates unchanged Dec 20, 2024
- Brent Oil Under Pressure Again: USD and China in Focus Dec 20, 2024
- Market round-up: BoE & BoJ hold, Fed delivers ‘hawkish’ cut Dec 19, 2024
- NZD/USD at a New Low: The Problem is the US Dollar and Local GDP Dec 19, 2024
- The Dow Jones has fallen for 9 consecutive trading sessions. Inflationary pressures are easing in Canada. Dec 18, 2024
- Gold Holds Steady as Investors Await Federal Reserve’s Rate Decision Dec 18, 2024
- European indices under pressure amid political and economic weakness in the main countries of the bloc Dec 17, 2024
- EUR/USD Holds Steady Ahead of Crucial Federal Reserve Meeting Dec 17, 2024
- Canadian dollar falls to a four-year low. France loses credit rating Dec 16, 2024
- Japanese Yen Hits Three-Week Low as Bank of Japan Holds Rate Steady Dec 16, 2024
