New Zealand Kiwi Dips Amid Fears Of Fewer Fed Cuts

Fundamental Analysis

* Kiwi Troubles: The New Zealand Kiwi declined against the dollar after the rise in the US Purchasing Manager Index (PMI) figures reignited concerns that persistent inflation in the services sector could keep price growth elevated for much longer than investors hoping for rate cuts had initially anticipated. Expectations for rate cuts diminished throughout the day, causing risk assets to fall and boosting demand for the US Dollar. Although there was slight support from an improvement in New Zealand Consumer Confidence, with the ANZ Roy Morgan Consumer Confidence index rising to 84.9 in May from 81.9 in April, this increase was not enough to lift overall sentiment. New Zealand consumer confidence remains low overall, staying close to levels seen during the pandemic response.

Technical Analysis

* Technical Breakout: NZDUSD was traded lower following recent retracement from the resistance level 0.61450. MACD which illustrate persistent bearish momentum signal suggest the pair to further extend its losses.

* Resistance and Support: If the bearish momentum persists, there’s a strong likelihood that the price will potentially head towards 0.6050. Conversely, a potential trend continuation may also be expected and the price could head back towards 0.6145.

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Potential Risks

Moving forward, the market will focus on upcoming U.S. data, including unemployment claims for the week ending May 18 and the release of the S&P Global PMIs, which could further influence the AUD/USD pair’s movement.

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Monitoring

Stay updated on US and Australian data, Fed 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.