Bullish Sign in NZD/USD After Bouncing Off the 200 Daily SMA

During most of last month, the NZD was mostly bullish, with the USD turning bearish on softer Fed statements and markets pricing in several rate cuts in 2024. The FED acknowledged these expectations, which have sent the USD diving lower again, while the NZD is benefiting from positive risk sentiment, driving commodities dollars higher.

Moving averages were acting as resistance on the daily chart when this pair was on a long-term bearish trend, but buyers have pushed the price above them, which turned into support, as this week’s bounce off the 200 SMA (purple) showed. The GDP report which was released yesterday from New Zealand was disappointing, but this pair continued the upside momentum nonetheless.

So the fundamental picture for the NZD is not looking good either, especially with China’s lackluster economic numbers. However, the US Federal Reserve’s shift in rhetoric, essentially implies the possibility of a dovish policy beginning in Q1 of 2024. NZD/USD increased as a result of the FOMC statement.

Yesterday’s bounce from the lows pushed the price closer to 0.6250 after bouncing off the moving average (purple) which stands below 0.61. After NZD/USD pushed above 0.6220, the bias has shifted back in favor of buyers.

New Zealand Q3 GDP Report

• New Zealand Q3 GD -0.3% vs 0.2% expected
• Q2 GDP was 0.5%, revised to 0.9%

Stats NZ highlights the key drivers:

Downwards drivers -– change in production:

• Manufacturing was down 3.4%
• Transport was down 4.5%
• Construction was down 1.7%
• Wholesale trade was down 1.9%

Upwards drivers – change in production:

• Healthcare and social assistance was up 2.3%
• Rental, hiring and real estate services was up 1.0%

NZD/USD Live Chart