NZD/USD Holds Steady Amid Trade War Jitters – Key Levels to Watch
NZD/USD Holds Firm Amid Trade Uncertainty – Will Tariffs Shake the Market?
The NZD/USD pair is showing resilience, trading within a narrow range of 0.5670-0.5680 ahead of a crucial announcement from former U.S. President Donald Trump regarding reciprocal tariffs. Despite hovering close to a multi-week low, the Kiwi finds support from improved global risk sentiment and a weaker U.S. Dollar (USD).
Fundamental Overview:
- Kiwi Gains on Positive Risk Sentiment: Optimism in global markets, fueled by a strong performance on Wall Street, has provided support for the New Zealand Dollar.
- USD Under Pressure: Expectations of a U.S. economic slowdown due to tariffs are weighing on the Greenback, increasing speculation about potential Federal Reserve rate cuts.
- China’s Economic Boost: The Caixin Manufacturing PMI surged to 51.2 in March, surpassing February’s 50.8, boosting demand for antipodean currencies like the NZD.
- Market Awaits Trump’s Tariff Decision: Investors remain cautious as they await Trump’s reciprocal tariff announcement, which could significantly impact risk sentiment and currency movements.
Despite these supportive factors, the NZD/USD pair struggles to extend its recovery, as trade war concerns keep traders from making aggressive bullish bets.
Technical Analysis – Chart:
- Downtrend Intact: NZD/USD remains in a downward channel, trading below key Moving Averages (SMA).
- Bearish Momentum: The Relative Strength Index (RSI) signals selling pressure, while the Stochastic oscillator remains neutral.
- Key Levels to Watch:
- Immediate Resistance: 0.5711
- Immediate Support: 0.5662
Trading Strategy – What’s Next for NZD/USD?
Following a sharp decline, NZD/USD found temporary support but failed to sustain its recovery. The pair is now testing key resistance, and a rejection at this level could trigger another downward move. If the price fails to break higher, traders might see renewed selling pressure.
Trade Idea:
- Limit Buy: 0.5705
- Take Profit: 0.5648
- Stop Loss: 0.5746
With major U.S. economic data releases, including JOLTS Job Openings and ISM Manufacturing PMI, set to hit the market, traders should brace for potential volatility. The focus, however, remains on Trump’s tariff announcement, which could be a game-changer for the NZD/USD outlook.