. NZD/USD Peaks at 0.5980, Bulls in Control - Capital Street FX

NZD/USD Peaks at 0.5980, Bulls in Control

NZD/USD Peaks at 0.5980, Bulls in Control

29 Apr 2024

NZD/USD hits a new peak, reaching around 0.5980, its highest level in two weeks.

FUNDAMENTAL OVERVIEW:

  • NZD/USD hovers near a two-week peak near 0.5980 amidst a brighter market sentiment.
  • The US Dollar weakens ahead of the Fed’s May 1 policy meeting.
  • The upcoming NZ Q1 Employment data will influence the trajectory of the Kiwi Dollar.

In Monday’s European session, the NZD/USD pair reaches a two-week peak of around 0.5980. The Kiwi currency gains 0.55% as investor interest in riskier assets remains strong. Meanwhile, the US Dollar declined due to concerns about its economic outlook, fueled by recent weak data from the United States.

The US Dollar Index (DXY) is hovering close to the critical support level of 105.50, influenced by pessimistic projections from the S&P Global PMI survey for April and lackluster Q1 Gross Domestic Product (GDP) figures.

Meanwhile, investors turn their attention to the Federal Reserve (Fed) monetary policy announcement, scheduled for Wednesday. According to the CME FedWatch tool, interest rates are expected to stay steady at 5.25% to 5.50%. Consequently, any new guidance regarding interest rates will impact future movements in the US Dollar.

On the New Zealand Dollar front, investors will closely monitor the Q1 Employment data, set to be released on Tuesday. The labor market is anticipated to have expanded by 0.3%, a slower rate compared to the previous 0.4% growth. Projections indicate a gradual increase in the Labor Cost Index, expected to rise by 0.8% from the 1.0% growth seen in the final quarter of 2023. Should labor market conditions remain tight, the Reserve Bank of New Zealand (RBNZ) might prolong its restrictive monetary policy stance.

NZD/USD TECHNICAL ANALYSIS DAILY CHART:

Technical Overview:

NZD/USD is currently trading within a down channel.

NZD/USD is positioned above all Moving Averages (SMA).

The Relative Strength Index (RSI) is in the Buying zone, while the Stochastic oscillator suggests a Positive trend.

Immediate Resistance level: 0.5985

Immediate support level: 0.5930

HOW TO TRADE NZD/USD

After a significant decline, NZD/USD found support and formed a double bottom pattern. Subsequently, the price reversed and began trading higher. Currently, it is approaching a resistance zone, and if this zone is breached, further upside movement is likely.

TRADE SUGGESTION- STOP BUY – 0.6003, TAKE PROFIT AT- 0.6076, SL AT- 0.5958.