NZD/USD to Remain Below 0.60 After Failing the Test at the Round Level
NZD/USD peaked above 0.60 on Monday but failed to hold the gains and reversed back down to 0.59 as the Us Treasury yields resumed the bullis
The New Zealand dollar turned bearish in summer as risk assets such as commodity currencies declined versus the US dollar, and it has continued to fall for more than three months, falling below 0.58 in late October. The Chinese economic problems we saw earlier this year after the country was reopened after three years of coronavirus lockdowns were weighing on risk assets, but we’ve recently seen some improvement as the conflict in Gaza is not spreading further in the region.
Besides that, this pair also increased on expectations that the FED might suspend its tightening of monetary policy. This feeling was exacerbated by the FED’s dovish policy decision last week and evidence of a slowing jobs market in the United States (US) following the poor employment figures.
On wider charts, NZD/USD remains bearish, and the positive retracement upward appears to have ended at the 100 daily SMA (green). That indicates a loss of momentum, which is typically followed by a downward reversal. The reversal came this week after the price peaked above 0.60 and NZD/USD fell to 0.59 lows yesterday, with the US Treasury yields resuming the uptrend again and pulling the USD higher. So, the decline is expected to continue after this sharp reversal and the next target will be last month’s lows below 0.58. Today we had inflation expectations by the Reserve Bank of New Zealand.
Reserve Bank of New Zealand Inflation Expectations
- RBNZ’s survey of inflation expectations: 1yrs at 3.6%, 2yrs at 2.76%
NZD/USD Live Chart
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