Skip to content NZDUSD Fundamental Analysis – 7-October-2024
As we approach the Reserve Bank of New Zealand’s (RBNZ) upcoming policy meeting, the New Zealand dollar has dropped to approximately $0.615. This decline comes in anticipation of what could be the RBNZ’s second reduction in interest rates this year.
The NZD/USD daily chart below shows the currency pair’s price as of this writing.
Surprise Rate Cut Recap
The RBNZ reduced its cash rates by 25 basis points in August, bringing them down to 5.25%. This action occurred nearly a year earlier than the central bank had initially projected. This early adjustment reflects the bank’s response to evolving economic conditions.
Market participants are now bracing for a more significant cut, with expectations firmly set on a 50-basis-point drop. This anticipated decision is critical as it could influence the economic landscape in New Zealand and beyond.
External Pressures
The New Zealand dollar is also facing downward pressure from international factors. Notably, the US dollar has seen an upswing, supported by unexpectedly strong US payroll figures.
These statistics have moderated the likelihood of a substantial rate cut by the US Federal Reserve. Moreover, increasing geopolitical tensions in the Middle East stir anxiety among investors, contributing to the cautious market atmosphere.
NZDUSD Analysis – 7-October-2024
FxNews—The NZD/USD downtrend extended to the $0.610 critical resistance. Meanwhile, the Stochastic and RSI 14 indicators hover in the oversold territory, depicting 9 and 21 in the description, respectively. Additionally, the Awesome oscillator shows green bars in its histogram, closing the gap to the signal line from below.
From a technical standpoint, the New Zealand dollar is expected to erase some of its recent losses against the American currency by targeting the $0.620 resistance. For this scenario to occur, the bulls must keep the pressure and hold the NZD/USD rate above 0.610.
Conversely, the bear market will be triggered again if NZD/USD conversion rate falls below $0.610 support.
Source FxNews—NZD/USD Technical Analysis
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