Key points:
The New Zealand dollar held firm around $0.614 on Thursday as investors focused on the upcoming US consumer inflation report.
Picture: NZDUSD trading flat ahead of key US inflation data, as observed on the VT Markets app.
With this key report in the horizon the, NZD/USD pair has been trading in a relatively tight range, with the price hovering around the 0.6150 level. The 30-minute chart shows that the price has struggled to break out of the range between 0.6142 and 0.6160 over the past two days, with no clear momentum in either direction.
The EMA (24, 24, 72) is sloping downward, reflecting the broader bearish trend that started earlier in the month. Meanwhile, the MACD remains neutral, with the histogram flattening, signaling a lack of momentum.
At the moment, the NZD/USD remains range-bound, and traders should watch for a breakout above 0.6160 or a breakdown below 0.6142 for clearer direction. In the absence of significant economic data or events, the pair may continue to consolidate in this narrow range until the U.S. inflation report is released.
We believe that the upcoming U.S. inflation report is expected to influence market direction. A softer-than-expected inflation figure could lead to speculation of a more aggressive rate cut by the Federal Reserve, which would likely weaken the U.S. dollar and push the NZD/USD higher.
Conversely, a stronger inflation reading could prompt the Fed to take a more cautious stance, putting downward pressure on the pair.
Within New Zealand itself, the Reserve Bank of New Zealand (RBNZ) has already surprised the markets by starting its rate-cutting cycle in August with a 25-basis point cut.
This marked a major shift after the central bank spent much of the last two years tightening monetary policy to rein in inflation. The RBNZ is expected to continue with additional rate cuts in its last two meetings this year.
Read also: Interest rate tug-of-war for central banks
Market participants currently anticipate the RBNZ’s cash rate, which stands at 5.25%, to decline to 3.0% by late next year.
Traders should brace for potential volatility in the NZDUSD currency pair as both US CPI data and the Federal Reserve’s next policy moves come into focus.
Education
Company
FAQ
Promotion
Risk Warning: Trading CFDs carries a high level of risk and may not be suitable for all investors. Leverage in CFD trading can magnify gains and losses, potentially exceeding your original capital. It’s crucial to fully understand and acknowledge the associated risks before trading CFDs. Consider your financial situation, investment goals, and risk tolerance before making trading decisions. Past performance is not indicative of future results. Refer to our legal documents for a comprehensive understanding of CFD trading risks.
The information on this website is general and doesn’t account for your individual goals, financial situation, or needs. VT Markets cannot be held liable for the relevance, accuracy, timeliness, or completeness of any website information.
Our services and information on this website are not provided to residents of certain countries, including the United States, Singapore, Russia, and jurisdictions listed on the FATF and global sanctions lists. They are not intended for distribution or use in any location where such distribution or use would contravene local law or regulation.
VT Markets is a brand name with multiple entities authorised and registered in various jurisdictions.
· VT Global Pty Ltd is authorised and regulated by the Australian Securities & Investments Commission (ASIC) under licence number 516246.
· VT Global is not an issuer or market maker of derivatives and is only allowed to provide services to wholesale clients.
· VT Markets (Pty) Ltd is an authorised Financial Service Provider (FSP) registered and regulated by the Financial Sector Conduct Authority (FSCA) of South Africa under license number 50865.
· VT Markets Limited is an investment dealer authorised and regulated by the Mauritius Financial Services Commission (FSC) under license number GB23202269.
· VTMarkets Ltd, registered in the Republic of Cyprus with registration number HE436466 and registered address at Archbishop Makarios III, 160, Floor 1, 3026, Limassol, Cyprus.
Copyright © 2024 VT Markets.