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* Rate Cut Speculation: The New Zealand Dollar has pulled back from its recent highs amid speculation of further rate cuts by the RBNZ. Despite being the top-performing G10 currency over the week—boosted by news of new stimulus measures in China and New Zealand’s main export market, the currency is currently being weigh by potential additional RBNZ rate cuts which aimed at stimulating the domestic economy. Money market pricing suggests that investors expect one more 50 basis point rate cut in 2024, with an additional cut not yet fully factored in.
* Technical Breakout: NZDUSD was traded lower following prior retracement from its high. MACD which illustrate bearish momentum signal with the formation of death cross suggest the pair to likely further extend its losses.
*Resistance and Support: If the bearish momentum persists, there’s a strong likelihood that the price will potentially head towards the support level 0.62600. Conversely, a potential reversal is also to be expected and the price could head back towards 0.63550.
Understand how technical analysis can help you in this trading opportunity.
Looking forward, investors are focusing on the release of key US data which is PCE inflation data for August on Friday, which may provide new insights into the Federal Reserve’s interest rate outlook.
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Stay updated on US and New Zealand data, central bank updates and any shifts in the US Dollar’s strength by following PU Prime’s market insights and daily financial news.
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Disclaimer: Trading derivatives involves high risks, and market conditions can change rapidly. The content is for informational purposes only and should not be considered as financial advice. Traders should conduct their own research and consider risk management strategies.
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