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NZD/USD falls on dovish RBNZ stance

  • RBNZ Governor Orr was dovish, which seems to put pressure on the New Zealand Dollar.
  • GDP and initial jobless claims cushion the USD. Weak Chicago PMI figures limit increases.
  • Markets adjusted their expectations for a rate cut in June, which also adds strength to the USD.

The NZD/USD pair is currently trading at 0.5977, reflecting a decline of 0.43%. The pair's move was influenced by Reserve Bank of New Zealand (RBNZ) Governor Orr's somewhat dovish comments and mixed data from the United States. Looking ahead to Friday's session, markets await US personal consumption expenditure (PCE) data for February.

RBNZ Governor Orr commented that inflation is normalizing while aggregate demand is slowing, which would lead to low and stable inflation on the horizon with normalized interest rates. In reaction, markets are betting on a 75 basis point easing in 2024, while the RBNZ hinted that the first cut would come in 2025, and as markets underestimate the bank, the NZD could suffer further losses.

On the USD side, the recent release of initial jobless claims showed numbers slightly below consensus, with 210,000 claims versus the 215,000 expected for the week ending March 23. Additionally, the fourth quarter Gross Domestic Product (GDP) was revised upwards, showing annual growth of 3.4%. However, not all economic indicators were positive; Chicago Purchasing Managers' Index (PMI) data for March from the Institute for Supply Management fell short of expectations, coming in at 41.4 vs. 46 expected and 44 previously.

Looking at Federal Reserve (Fed) expectations, the probability of a rate cut in June has dropped to 66% from 85% earlier in the week, providing some support to the dollar. That said, the release of personal consumption expenditures (PCE) on Friday is likely to fuel volatility markets as investors could readjust their bets on the Fed.

Technical analysis of the NZD/USD pair

On the daily chart, the NZD/USD Relative Strength Index (RSI) is noticeably fixed in negative territory. The latest RSI reading marks a negative trend again, with a score of 33 suggesting strong bearish sentiment in the market. At the same time, the moving average convergence histogram (MACD) shows red bars, evidencing negative momentum that further reinforces the bearish pressure on this currency pair.

Moving on to the simple moving averages (SMA) analysis, the pair is trading below the respective 20-day, 100-day, and 200-day simple moving averages (SMA), supporting the continuation of the negative trend.

NZD/USD daily chart


Latest price today 0.5975
Today I change daily -0.0029
Today's daily variation -0.48
Today's daily opening 0.6004
daily SMA20 0.6091
50 daily SMA 0.6109
SMA100 daily 0.6136
SMA200 Journal 0.6074
Previous daily high 0.6011
Previous daily low 0.5987
Previous weekly high 0.6107
Previous weekly low 0.5989
Previous Monthly High 0.6219
Previous monthly low 0.6037
Daily Fibonacci 38.2 0.6002
Fibonacci 61.8% daily 0.5996
Daily Pivot Point S1 0.5991
Daily Pivot Point S2 0.5977
Daily Pivot Point S3 0.5967
Daily Pivot Point R1 0.6015
Daily Pivot Point R2 0.6025
Daily Pivot Point R3 0.6039

Source: Fx Street

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