CFD Trading Rate New Zealand Dollar vs US Dollar (NZDUSD)

• NZD/USD loses ground following the remarks from Fed’s Powell saying lowering interest rate ‘over time.’
• US ISM Manufacturing PMI is expected to improve to 47.5 in September, from the previous 47.2 reading.
• New Zealand’s Building Permits declined 5.3% MoM in August, swinging from a significant 26.4% increase in the prior month.

NZD/USD trades around 0.6310 during the European hours on Tuesday, breaking its three-day winning streak. On Monday, Federal Reserve (Fed) Chairman Jerome Powell said the central bank is not in a hurry and will lower its benchmark rate ‘over time,’ which has supported the US Dollar (USD) and undermined the NZD/USD pair.

However, the subdued US Treasury yields may limit the upside of the US Dollar. The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against other six major currencies, extends its gains for the second successive day. The DXY trades around 101.00 with 2-year and 10-year yields on US Treasury bonds standing at 3.62% and 3.76%, respectively, at the time of writing.

Traders await US manufacturing data including ISM Manufacturing PMI later in the North American session, which is expected to improve to 47.5 in September, from the previous 47.2 reading. This report may provide a reliable outlook on the state of the US manufacturing sector.

Seasonally adjusted Building Permits in New Zealand showed a 5.3% month-on-month decline in August, following a significant 26.4% increase in the prior month. This reflects a slowdown in the issuance of consents for new dwellings. Additionally, the NZIER Business Confidence index dropped by 1% quarter-on-quarter in the third quarter, showing an improvement compared to the 44% decline observed in the previous quarter, though overall sentiment remains cautious.

The Reserve Bank of New Zealand (RBNZ) responded to slowing economic growth by beginning to ease its policy in August, a trend that may extend into the fourth quarter. The main uncertainty lies in the speed of rate cuts, with most economists predicting a 25 basis point reduction at each of the two remaining meetings this year, aligning with Governor Adrian Orr's commitment to a gradual approach.

The New Zealand (NZ) Treasury’s economic assessment, released on Tuesday, indicated that they “don't expect activity to have picked up much in the latest quarter.” While GDP for the June quarter declined by 0.2%, the drop was smaller than anticipated, with population growth concealing underlying economic weakness. As a substantial amount of data is set to be released in the next two weeks, we should soon have a clearer understanding of where the economy stands in the current cycle.

• NZD/USD loses ground near 0.6340 in Tuesday’s early Asian session. 
• Fed’s Powell said the central bank is not in a hurry to cut rates quickly, will be guided by data.
• The Chinese fresh stimulus measure might cap the downside for the Kiwi. 

The NZD/USD pair trades on a softer note around 0.6340, snapping the three-day winning streak during the early Asian session on Tuesday. The modest rebound in the US Dollar (USD) after US Federal Reserve (Fed) Chair Jerome Powell’s speech weighs on the pair. Investors will keep an eye on the US September ISM Manufacturing Purchasing Managers Index (PMI), which is due on Tuesday. 

Fed’s Powell on Monday signaled that additional rate cuts are in the pipeline, though their size and pace would depend on the evolution of the economy. Powell further stated that the Fed's current goal is to support a largely healthy economy and job market, rather than rescue a struggling economy or prevent a recession.

Interest rate futures contracts have priced in a nearly 35.4% chance of a half-point cut in November, versus a 64.6% possibility of a quarter-point cut, according to the CME FedWatch Tool. The US September labor market data will be closely watched on Friday. The US economy is expected to see 140K job additions in September, while the Unemployment Rate is projected to remain unchanged at 4.2%. 

On the Kiwi front, optimism over more stimulus from China might cap the downside of the New Zealand Dollar (NZD). China's central bank stated that it would tell banks to lower mortgage rates for existing home loans before October 31, as part of sweeping policies to support the country's beleaguered property market. This, in turn, acts as a tailwind for NZD/USD as China is the largest export partner of New Zealand. 

The New Zealand Dollar (NZD) could test the resistance at 0.6370 before the risk of a pullback increases; a sustained break above this level is unlikely. In the longer run, NZD is likely to rise above 0.6370; it is unclear if there is sufficient momentum for it to reach 0.6410, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann note.

Can try testing the resistance at 0.6370

24-HOUR VIEW: “Our view for NZD to ‘continue to rise’ last Friday was correct, but we did not expect it to break above 0.6355 (high has been 0.6367). The rapid rise seems to be overdone, but NZD could test the resistance at 0.6370 before the risk of a pullback increases. A sustained break above 0.6370 is unlikely today. To maintain the momentum, NZD must remain above 0.6305 with minor support at 0.6325.”

1-3 WEEKS VIEW: “We turned neutral in NZD last Thursday (26 Sep, 0.6260), indicating that it ‘is likely to trade between 0.6200 and 0.6340.’ After NZD rose and approached 0.6340, we indicated on Friday (27 Sep, spot at 0.6325) that ‘despite the advance, upward momentum has not increased much, and to continue to advance, NZD must break clearly above 0.6355.’ NZD subsequently rose to 0.6367 in NY trade. From here, we expect NZD to rise above 0.6370, but it is unclear for now if there is sufficient momentum for it to reach last July’s high, near 0.6410. To keep the momentum going, NZD must not break below 0.6280 (‘strong support’ level was at 0.6240 last Friday).”

• NZD/USD may approach its 15-month high of 0.6409 level.
• The analysis of a daily chart suggests an ongoing bullish bias for the pair.
• A nine-day EMA at 0.6293 appears as the support, which is aligned with the lower boundary of the ascending channel.

NZD/USD extends its winning streak for the third successive day, trading around 0.6360 during the early European hours on Monday. On the daily chart, the pair is moving upward within the ascending channel pattern, suggesting an ongoing bullish bias.

Additionally, the 14-day Relative Strength Index (RSI) remains above the 50 level, confirming an ongoing bullish sentiment. The RSI may appreciate toward the 70 mark, suggesting a potential for further gains.

Additionally, the nine-day Exponential Moving Average (EMA) is positioned above the 50-day EMA, suggesting the short-term price trend is stronger for the NZD/USD pair.

On the upside, the NZD/USD pair may explore the area around its 15-month high of 0.6409 level, recorded in December 2023, aligned with the upper boundary of the ascending channel.

In terms of support, the NZD/USD pair may test the nine-day Exponential Moving Average (EMA) at the 0.6292 level, aligned with the lower boundary of the ascending channel.

A break below the ascending channel could weaken the bullish bias and put pressure on the NZD/USD pair to test the 50-day EMA at 0.6172 level, followed by the five-week low of 0.6096 level.

NZD/USD: Daily Chart

• NZD/USD hits a fresh YTD peak on Monday amid optimism over more stimulus from China. 
• Geopolitical risks lend some support to the safe-haven buck and act as a headwind for the pair.
• Traders look forward to the Fed Chair Jerome Powell’s speech to grab short-term opportunities.

The NZD/USD pair attracts some buyers for the third successive day and climbs to a fresh year-to-date (YTD) peak, around the 0.6375 region during the Asian session on Monday. 

Against the backdrop of a slew of stimulus measures announced last week, the People's Bank of China (PBOC) said on Sunday that it would tell banks to lower mortgage rates for existing home loans before October 31. The move provides an additional boost to the already upbeat market mood and turns out to be a key factor benefiting the risk-sensitive Kiwi. Apart from this, subdued US Dollar (USD) price action, amid dovish Federal Reserve (Fed) expectations, further seems to act as a tailwind for the NZD/USD pair. 

According to the CME Group's FedWatch Tool, the markets are currently pricing in over a 50% chance of another oversized interest rate cut by the US central bank in November. This keeps the USD Index (DXY), which tracks the Greenback against a basket of currencies, near its lowest level since July 2023 touched last week. That said, the risk of a further escalation of conflict in the Middle East and an out-out war in the region seems to underpin the safe-haven buck, capping the upside for the NZD/USD pair. 

Meanwhile, the mixed PMI prints released from China earlier today do little to impress bulls or provide any impetus. In fact, China’s official Manufacturing PMI improved to 49.8 in September from 49.1, beating estimates of 49.5, while the NBS Non-Manufacturing PMI unexpectedly fell to 50.0 from August’s 50.3 figure. China's Caixin Manufacturing PMI contracted to 49.3 in September, from 50.4 in the previous month, and the Caixin Services PMI dropped to 50.3 during the reported month from 51.6 in August.

Nevertheless, the fundamental backdrop suggests that the path of least resistance for spot prices is to the upside and supports prospects for an extension of a three-week-old uptrend. Investors now look to the release of the Chicago PMI, due later during the early North American session, though the focus will remain glued to Fed Chair Jerome Powell's speech. This, along with the broader risk sentiment, will drive the USD demand and allow traders to grab short-term opportunities around the NZD/USD pair.

• The NZD/USD climbed to fresh highs since December.
• The RSI stands deep in positive area and the MACD shows rising green bars supporting an overall bullish outlook.
• If the bulls fail to conquer 0.6400, it might trigger a downward correction.

On Friday, the NZD/USD pair continued its ascent from Thursday, adding 0.20%, reaching 0.6354 and continuing the bullish trend.

The technical indicators suggest that the buying pressure is likely to continue. The Relative Strength Index (RSI) is currently at 66, which is near the overbought area. This suggests that buying pressure is strong but that the movements might have become over-extended. The Moving Average Convergence Divergence (MACD) is also bullish, with the histogram rising and green.

NZD/USD daily chart

The overall outlook for the NZD/USD is bullish. The pair is trading above its key moving averages, and the technical indicators are regaining strength. Buyers seem to have hit a solid resistance at 0.6350, but buyers might be preparing to retest it. A break above could pave the way for more upside and the pair could test the 0.6400 level. On the other hand, a rejection at this level might trigger selling pressure and the bears might target the 0.6300 area and even more push the pair down to the 0.6250-0.6200. That being said, if the pair holds the 20-day Simple Moving Average (SMA) at 0.6220, the bullish outlook will remain intact.

The New Zealand Dollar (NZD) could continue to rise but is unlikely to break above 0.6355. In the longer run, to continue to advance, NZD must break clearly above 0.6355, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann note.

To advance, NZD must break above 0.6355

24-HOUR VIEW: “After NZD fell sharply on Wednesday, we indicated yesterday that it ‘could continue to decline, but it is unlikely to challenge the major support at 0.6200.’ Our view was incorrect, as NZD rose instead, reaching a high of 0.6332. While NZD could continue to rise, lackluster momentum suggests it is unlikely to break above 0.6355 (there is another resistance at 0.6340). Support is at 0.6300, followed by 0.6275.”

1-3 WEEKS VIEW: “We turned neutral in NZD yesterday (26 Sep, 0.6260), indicating that it ‘is likely to trade between 0.6200 and 0.6340.’ We did not expect NZD to rise and approach 0.6340 as quickly (high has been 0.6332). Despite the advance, upward momentum has not increased much. To continue to advance, NZD must break clearly above 0.6355. The probability of NZD breaking clearly above 0.6355 seems low for now, but it will remain intact as long as 0.6240 is not breached in the next few days.”

• NZD/USD depreciates due to market caution ahead of August’s US Personal Consumption Expenditures Price Index data.
• The upside of the US Dollar could be limited due to the dovish Fedspeak.
• The ANZ Roy Morgan Consumer Confidence Index rose to 95.1 points in September, from 92.2 prior.

NZD/USD retraces its recent gains, trading around 0.6300 during the European hours on Friday. This downside is attributed to the improved US Dollar (USD) amid market caution ahead of the US Personal Consumption Expenditures (PCE) Price Index data for August. The Fed’s preferred inflation indicator is scheduled to be released later in the North American session.

On the data front, the US Gross Domestic Product Annualized increased at a rate of 3.0% in the second quarter, as estimated, according to the US Bureau of Economic Analysis (BEA) on Thursday. Meanwhile, the GDP Price Index rose 2.5% in the second quarter.

Additionally, US Initial Jobless Claims for the week ending September 20 were reported at 218K, according to the US Department of Labor (DoL). This figure came in below the initial consensus of 225K and was lower than the previous week's revised number of 222K (previously reported as 219K).

However, the US Dollar might have received downward pressure following the dovish remarks from the US Federal Reserve (Fed) officials. According to Reuters, Fed Governor Lisa Cook stated on Thursday that she supported last week's 50 basis point (bps) interest rate cut, citing increased "downside risks" to employment.

On the Kiwi front, the ANZ Roy Morgan Consumer Confidence Index rose for the third consecutive month, reaching 95.1 points in September, up from the previous reading of 92.2. This marked the highest reading since January 2022.

However, the New Zealand Dollar (NZD) is under pressure due to growing expectations that the Reserve Bank of New Zealand (RBNZ) will cut interest rates again in October, with markets pricing in a 67% probability of a 50 basis point rate cut. Investors currently anticipate the 5.25% cash rate to decline to 2.83% by the end of 2025.

• NZD/USD drifts lower amid a modest USD uptick, though the downside seems limited.
• The optimism over additional stimulus from China should act as a tailwind for the Kiwi.
• Dovish Fed expectations to cap the USD and lend some support to the currency pair.

The NZD/USD pair attracts some sellers near the 0.6335 region during the Asian session on Friday and reverses a part of the previous day's strong move up. Spot prices currently trade around the 0.6300 mark, down 0.30% for the day, though remain within the striking distance of the YTD peak touched earlier this week. 

The US Dollar (USD) ticks higher in a familiar range amid some repositioning ahead of the crucial US inflation data and turns out to be a key factor exerting some downward pressure on the NZD/USD pair. The US Personal Consumption Expenditure (PCE) Price Index is due for release later today and will be looked upon for cues about the Federal Reserve's (Fed) rate-cut path. This, in turn, will play a key role in influencing the near-term USD price dynamics and provide some meaningful impetus to the currency pair. 

Heading into the key data risk, bets for a more aggressive policy easing by the Fed might keep the buck confined in a familiar range held over the past two weeks or so and closer to the YTD low touched last week. In fact, the markets are currently pricing in over a 50% chance for another oversized interest rate cut at the next FOMC policy meeting in November. This overshadowed Thursday's better-than-expected US macro data, which, along with the upbeat market mood, should cap the upside for the safe-haven buck. 

Investors continue to cheer a slew of stimulus measures announced by the People's Bank of China (PBOC) this week, including Friday's announcement to cut the seven-day repo rate to 1.5% from 1.7% and lower the Reserve Requirement Ratio (RRR) by 50 bps. Furthermore, the hopes that interest rate cuts will boost global economic activity continue to fuel the risk-on rally across the global equity markets. This, in turn, warrants some caution before positioning for any further intraday depreciating move for the NZD/USD pair.

• The NZD/USD pair recovered on Thursday, settling at 0.6330.
• The RSI and MACD indicators are turning bullish, supporting the prospect of further gains.
• Buyers cleared most of Wednesday’s losses.

On Thursday, the NZD/USD pair recovered from Wednesday's losses, gaining by 0.95% and settling at 0.6330. The pair is moving in a sideways trading pattern, indicating indecision between the bulls and bears. That being said,bulls seem to have an advantage.

The technical indicators suggest that the buying pressure behind NZD/USD is increasing. The Relative Strength Index (RSI) is rising above 50 the Moving Average Convergence Divergence (MACD) histogram prints rising green bars, also giving arguments to the buyers.

NZD/USD daily chart

The overall outlook for the NZD/USD is bullish. The pair is trading above its key moving averages, and the technical indicators are regaining strength. Buyers seem to have hit a solid resistance at 0.6350 but seem to be gearing up for a retest. In that sense a break above could pave the way for for upside and the pair could test the 0.6400 level. On the other hand, if the pair runs out of steam, the 0.6300 area can act as a barrier to selling pressure.

The New Zealand Dollar (NZD) could continue to decline, but it is unlikely to challenge the major support at 0.6200. In the longer run, outlook for NZD is neutral; it is likely to trade between 0.6200 and 0.6340, UOB Group FX strategists Quek Ser Leang and Lee Sue Ann note.

Likely to trade between 0.6200 and 0.6340

24-HOUR VIEW: “Our view for ‘further NZD strength’ yesterday was incorrect, as it plunged from 0.6356 to 0.6261. The sharp decline has gathered some momentum, and NZD could continue to decline today. However, given that conditions are already oversold, NZD is unlikely to challenge the major support at 0.6200 (minor support is at 0.6235). Resistance is at 0.6290, followed by 0.6315.”

1-3 WEEKS VIEW: “After NZD surged two days ago, we indicated yesterday (25 Sep, spot at 0.6350) that it ‘is expected to head higher, potentially to 0.6410.’ We did not anticipate the ensuing selloff that sent NZD plunging to 0.6261. The breach of our ‘strong support’ level at 0.6270 indicates that the buildup in momentum has faded. We hold a neutral NZD view for now, and we expect it to trade between 0.6200 and 0.6340.”

• NZD/USD gains ground as it maintains its position within an ascending channel pattern.
• The 14-day RSI remains above the 50 level, supporting the notion of an ongoing uptrend.
• A break below the ascending channel would weaken the ongoing bullish bias.

NZD/USD recovers its recent losses from the previous session, trading around 0.6280 during the early European hours on Thursday. On the daily chart, the pair is testing the lower boundary of the ascending channel pattern. A successful breach below the ascending channel would weaken the ongoing bullish bias.

However, the 14-day Relative Strength Index (RSI) remains above the 50 level, confirming the ongoing bullish trend is intact. Additionally, the nine-day Exponential Moving Average (EMA) is positioned above the 50-day EMA, suggesting the short-term price trend is stronger for the NZD/USD pair.

On the upside, the NZD/USD pair may explore the region around the upper boundary of the ascending channel at the 0.6380 level. A breakthrough above the upper boundary could strengthen bullish bias and support the pair to revisit the 15-month high of 0.6409 level, recorded in December 2023.

In terms of support, the NZD/USD pair may test the immediate nine-day Exponential Moving Average (EMA) at the 0.6251 level. A break below this level could weaken the bullish sentiment and put pressure on the pair to approach the 50-day EMA at 0.6156 level, followed by its five-week low of 0.6106 level.

NZD/USD: Daily Chart

• NZD/USD trades with mild gains near 0.6260 in Thursday’s Asian session. 
• Fed's Kugler said she strongly supported half-point rate cut. 
• China's rate cuts and new stimulus measures support the Kiwi. 

The NZD/USD pair trades with mild positive bias around 0.6260 on Thursday during the Asian trading hours. The uptick of the pair is bolstered by the fresh Chinese stimulus plans and the softer US Dollar (USD) broadly. The final US Gross Domestic Product (GDP) Annualized for the second quarter (Q2) and Federal Reserve (Fed) Chair Jerome Powell's speech will be the highlights on Thursday.

The rising Fed deeper rate cut expectation in November weighs on the Greenback. Meanwhile, the US Dollar Index (DXY), which tracks the USD’s value against six major currencies, edges lower to 100.85. Federal Reserve Governor Adriana Kugler said on Wednesday that she will support additional rate cuts going forward, adding that the Fed should keep the focus on reducing inflation and also shift attention to maximum employment. The markets have priced in nearly 57.4% odds of a second 50 bps rate cut in the November meeting, while the chance of 25 bps stands at 42.6%, according to the CME FedWatch Tool. 

The final US Q2 GDP data will be released later in the day, which is projected to expand by 3.0%. On Friday, the attention will shift to the Personal Consumption Expenditures Price Index (PCE), which could be further interpreted by the Fed and might offer some cues about the inflation trajectory in the US. The headline PCE is expected to show an increase of 2.3% YoY in August, while the core PCE is forecast to rise 2.7%. 

On the Kiwi front, the People's Bank of China (PBOC) unleashed a swath of stimulus measures including cuts to its benchmark interest rate and reducing the reserve requirement ratio (RRR). This, in turn, lifts the China-proxy New Zealand Dollar (NZD) as China is the largest export partner to New Zealand. Nonetheless, the cautious mood ahead of the key US data or safe-haven flows amid the ongoing geopolitical risks could support the Greenback and cap the pair’s upside. 

• The NZD/USD pair declined by more than 1% on Wednesday, from highs since January.
• The RSI and MACD indicators are both pointing to decreasing buying momentum.
• Despite the pullback, the pair remains in a strongly bullish outlook.

On Wednesday, the NZD/USD pair encountered selling pressure, declining by 1.20% and settling at 0.6260. This reversal halted a five-day winning streak and marked a retreat from multi-month highs reached on Tuesday.

The technical indicators suggest that the buying pressure behind NZD/USD is decreasing. The Relative Strength Index (RSI) has risen near the overbought threshold, but it is currently declining sharply, indicating that buying pressure is easing. Similarly, the Moving Average Convergence Divergence (MACD) histogram remains green, but it is also decreasing, aligning with the RSI's bearish signals.

NZD/USD daily chart

Despite the pullback, the NZD/USD pair maintains a strongly bullish outlook. The pair is trading above its key moving averages, and still near its yearly highs. On the upside, resistance levels to watch include 0.6300, 0.6350, and 0.6400. If the pair fails to jump back above 0.6300, it could experience a deeper correction, probably toward 0.6200.

Surge in momentum is likely to lead to further New Zealand Dollar (NZD) strength to 0.6380; 0.6410 is unlikely to come under threat. NZD is expected to continue to head higher, potentially to 0.6410, UOB Group FX strategists Quek Ser Leang and Peter Chia note.

NZD to head higher, potentially to 0.6410

24-HOUR VIEW: “After NZD rose sharply two days ago, we indicated yesterday that “the increase in momentum suggests further NZD strength towards 0.6290.” We added, “the major resistance at 0.6310 is unlikely to come into view.” NZD rose more than expected, soaring to a high of 0.6343 in late NY trade before continuing to rise in Asian trade today. The surge in momentum is likely to lead to further advance in NZD even though the major resistance at 0.6410 is unlikely to come under threat. The minor resistance at 0.6380 appears to be within reach. Support is at 0.6330, a breach of 0.6310 would suggest that NZD is not advancing further.”

1-3 WEEKS VIEW: “Yesterday (24 Sep, spot at 0.6265), we turned positive in NZD, indicating that it “could head higher to 0.6310, but at this time, the probability of it breaking clearly above this level is not high.” We added, “only a breach of 0.6215 (‘strong support’ level) would mean that the current buildup in upward momentum has eased.” Our view of a higher NZD was not wrong, but we did not anticipate the rapid manner in which it broke above 0.6310 and soared to 0.6343. We continue to expect a higher NZD, aiming for an advance to 0.6410. On the downside, the ‘strong support’ level has moved higher 0.6270.”

• NZD/USD may regain ground as it is moving upward within an ascending channel pattern, indicating a bullish bias.
• The 14-day RSI is slightly below the 70 level, indicating a possible upward momentum, with a potential for consolidation.
• The upper boundary of the ascending channel at 0.6360 appears as the immediate resistance.

NZD/USD breaks its five-day winning streak, trading around 0.6330 during the European session on Wednesday. On the daily chart, the pair is moving upward within an ascending channel pattern, indicating a bullish bias.

Additionally, the 14-day Relative Strength Index (RSI) remains above the 50 level, confirming the ongoing bullish trend is intact. Although, the RSI is positioned slightly below the 70 mark, suggesting upward gains remain probable but could face a consolidation soon.

On the upside, the NZD/USD pair is testing the upper boundary of the ascending channel at the 0.6360 level. A breakthrough above the upper boundary could strengthen bullish bias and support the pair to explore the region around the psychological level of 0.6300.

In terms of support, the NZD/USD pair may test the nine-day Exponential Moving Average (EMA) at the 0.6257 level, which is aligned with the lower boundary of the ascending channel. A break below the channel could weaken the bullish sentiment and put pressure on the pair to navigate the area around its five-week low of 0.6106 level.

NZD/USD: Daily Chart

• NZD/USD has marked a nine-month high of 0.6355 on Wednesday.
• The New Zealand Dollar gains ground as the largest export partner China has injected fresh monetary stimulus.
• The US Dollar struggles following a weaker consumer confidence data adding to dovish sentiment surrounding the Fed.

NZD/USD extends its gains for the third successive session, trading around 0.6340 during the Asian hours on Wednesday. The pair marked a nine-month high of 0.6355 earlier in the day. The upside of the New Zealand Dollar (NZD) could be attributed to a stronger outlook for foreign currency inflows amid fresh monetary stimulus by New Zealand’s largest export partner China.

People's Bank of China (PBOC) Governor Pan Gongsheng announced on Tuesday that China will reduce the reserve requirement ratio (RRR) by 50 basis points (bps). Gongsheng also noted that the central bank would lower the 7-day repo rate from 1.7% to 1.5%, and reduce the down payment for second homes from 25% to 15%. Additionally, the PBOC cut the one-year Medium-term Lending Facility (MLF) rate from 2.30% to 2.0% on Thursday, following the last reduction in July 2024, when the rate was lowered from 2.50%.

Additionally, the Kiwi Dollar receives support from the stronger purchasing power of neighboring Australians after a hawkish hold by the Reserve Bank of Australia (RBA) lifted the Australian Dollar (AUD). The RBA held the Official Cash Rate (OCR) steady at 4.35% on Tuesday. RBA Governor Michele Bullock also confirmed that rates will remain on hold for now and clarified that a rate hike was not explicitly considered during the meeting.

The US Dollar (USD) received downward pressure following softer-than-expected consumer confidence data from the United States (US) released on Tuesday, which added to dovish expectations for the Federal Reserve (Fed) for its further policy decision. US Consumer Confidence Index fell to 98.7 in September from an upwardly revised 105.6 in August. This figure registered the biggest decline since August 2021.

On Tuesday, Federal Reserve Governor Michelle Bowman stated that key inflation indicators are still "uncomfortably above" the 2% target, urging caution as the Fed moves forward with interest rate cuts. Despite this, she expressed a preference for a more conventional approach, advocating for a quarter percentage point reduction.

• The NZD/USD pair has risen sharply to trade at 0.6340, a 1% rise, suggesting strong buying pressure.
• The RSI and MACD indicators are both sharply rising, indicating increasing buying momentum.
• With the pair near 0.6350, it tallied its highest level since December.

On Tuesday, the NZD/USD pair rose sharply, gaining more than 1% and moving to 0.6340, levels not seen since December of 2023.

The Relative Strength Index (RSI) is currently at 70, in the overbought zone. Looking at the Moving Average Convergence Divergence (MACD) confirms these conditions, printing rising green bars. However, traders should remain vigilant for a potential reversal as the upward movements may be over-extended and a consolidation might be necessary.

NZD/USD daily chart

The pair maintains a bullish outlook, trading above its major moving averages and holding strong at support levels of 0.6200, 0.6180, and 0.6150. On the upside, resistance lies at 0.6280, 0.6300, and 0.6310. If the pair manages to close above 0.6280, it could signal further upward momentum, with the next target set around early September highs near 0.6300. Breaking through these resistance points with solid trading volume may strengthen the bullish case.

Traders shouldn’t take off the table a downwards consolidation and the mentioned supports could be used to consolidate the recent gains.

• NZD/USD surges to near 0.6300 as China announces a slew of monetary stimulus.
• The Fed is expected to opt a 50-bps interest rate cut in November.
• Investors await the US core PCE inflation data for August.

The NZD/USD pair rallies to near the key resistance of 0.6300 in Tuesday’s North American session. The Kiwi asset strengthens on the firm New Zealand Dollar (NZD), which is enjoying higher inflows after the announcement of China’s massive stimulus, with the aim to revive the economic prospects, uplifting household spending and real estate demand.

It is worth noting that New Zealand (NZ) is one of the leading trading partners of China, and the announcement of fresh stimulus will prompt Kiwi exports.

Meanwhile, the US Dollar (USD) remains under pressure amid growing discussions that the Federal Reserve (Fed) extend the policy-easing cycle aggressively. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, falls to near 100.75.

Going forward, investors will focus on commentaries from Fed officials and the United States (US) Personal Consumption Expenditure Price Index (PCE) for August, which will be published on Friday. The core PCE inflation is the Fed’s preferred inflation gauge, which is estimated to have grown at a faster pace of 2.7% from 2.6% in July.

NZD/USD extends its winning spell for the fifth trading day on Tuesday. The Kiwi asset approaches the annual high of 0.6400 formed on 26 December 2023. Upward-sloping 20-day Exponential Moving Average (EMA) near 0.6200 suggests that the near-term outlook is upbeat.

The 14-day Relative Strength Index (RSI) strives to sustain above 60.00. A bullish momentum would trigger if the oscillator manages to do so.

Further upside above the Year-To-Date (YTD) high of 0.6330 would drive the asset towards December 26 high of 0.6400, followed by 25 January 2023 low of 0.6450

In an alternate scenario, a downside move would appear if the asset decisively breaks July 17 high near 0.6100. This would push the asset lower to May 3 high at 0.6046 and the psychological support of 0.6000.

NZD/USD daily chart