NZD/USD Price Forecast: Jumps to near three-week high of 0.6030

• NZD/USD moves higher to near 0.6030 with a focus on RBNZ monetary policy.
• The RBNZ is expected to leave its OCR unchanged at 5.5%.
• The next move in the US Dollar will be guided by the US Inflation data for July.

The NZD/USD pair climbs to near almost three-week high of 0.6030 in Monday’s North American session. The Kiwi asset strengthens as the New Zealand Dollar (NZD) performs strongly ahead of the Reserve Bank of New Zealand’s (RBNZ) monetary policy announcement on Wednesday.

The RBNZ is widely anticipated to keep its Official Cash Rate (OCR) steady at 5.5%. Therefore, investors will keenly focus on the interest rate guidance.

Recently, the New Zealand Institute of Economic Research (NZIER) ran a “shadow board”, which showed that analysts were divided over the August rate cut. Over half of analysts favored a quarter-to-a-percent rate cut to prevent the economy from slowing further. Other analysts wanted to see more evidence of inflation easing further.

Meanwhile, the US Dollar (USD) trades sideways, with investors focusing on the United States (US) Consumer Price Index (CPI) data for July, which will be published on Wednesday. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, stays in a tight range above 103.00.

NZD/USD struggles to extend upside above the immediate supply zone plotted in the range of 0.6037-0.6046 on a daily timeframe. The asset has recovered strongly above the 20-day Exponential Moving Average (EMA) near 0.5990, suggesting that the near-term outlook is bullish. The major aims to stabilize above the 50-day EMA, which hovers around 0.6030.

The 14-day Relative Strength Index (RSI) has returned inside the 40.00-60.00 range, suggesting that the bearish momentum has ended.

More upside would appear if the asset decisively breaks May 3 high at 0.6046. This would push the asset higher to July 17 high near 0.6100 and July 12 high of 0.6127.

In an alternate scenario, a downside move below April 19 low around 0.5850 would drag the asset towards the round-level support of 0.5800, followed by 26 October 2023 low at 0.5770.

NZD/USD daily chart