As traders wait for the RBNZ rate decision, the New Zealand dollar continues to rise.
Tuesday’s trading of the New Zealand Dollar (NZD) is stronger due to the Greenback’s little decrease. The likelihood of the Reserve Bank of New Zealand (RBNZ) cutting rates on Wednesday was lessened by the better-than-expected New Zealand employment data released last week, which is still supportive of the Kiwi. Furthermore, given that China is New Zealand’s biggest trading partner, indications that Chinese demand is increasing may support the NZD’s rise.
However, the US Dollar (USD) may rise as a result of safe-haven purchases made in the midst of heightened geopolitical unrest in the Middle East. We’ll be keenly following Wednesday’s news conference and RBNZ interest rate announcement. In the short run, the hawkish remarks made by RBNZ Governor Adrian Orr could strengthen the NZD relative to the USD. Traders will also be watching US economic statistics, which should provide additional insight into the Federal Reserve’s (Fed) rate stance. On Tuesday, Wednesday, and Thursday, respectively, the Producer Price Index (PPI), Consumer Price Index (CPI), and Retail Sales will be revealed.
Throughout the day, the New Zealand Dollar is trading higher. On the daily chart, the NZD/USD pair continues to have a bearish perspective because it is still below the significant 100-day Exponential Moving Average (EMA). However, the price would restart its upward trend if it solidly crossed above the important moving average. The 14-day Relative Strength Index (RSI), on the other hand, is marginally above the 50 midline, suggesting a possible short-term move in sentiment towards more bullishness.
NZD/USD may be exposed to the 100-period EMA at 0.6050 in the event of a bullish turn. The upper bound of the Bollinger Band, 0.6082, will witness a rally in the event that further purchasing occurs above this level. The next upside objective is found much further north at 0.6134, the high from July 8.
Conversely, a low of August 6 at 0.5912 serves as the pair’s first level of support. Prolonged losses below this mark may lead to 0.5856, the July 29 low, and the Bollinger Band’s lower boundary.
