NZDUSD breaks lower
NZDUSD continues its downtrend following yesterday’s sharp decline following the RBNZ’s “dovish rise”.
The Reserve Bank of New Zealand (RBNZ) signaled the end of its rate hike cycle yesterday, after raising rates by 25 basis points to a 14-year high of 5.5%. However, the decision, which was interpreted as “dovish” by the market and analysts, put an end to expectations for further upside and resulted in a decline of more than 2.16%. NZDUSD
USD/USD
NZD/USD is a commonly offered currency pair representing the New Zealand Dollar or Kiwi and US Dollar. The pair is popular for exposure to a commodity currency, namely the NZD, which helps capture traders’ risk appetite. Like its Antipodean counterpart, the Australian dollar, NZD/USD is seen as carry, in part due to interest rate differentials favoring the NZD. The NZD is the seventh most liquid pair in the world at the time of writing, with the USD being the most liquid pair in the world.
NZD/USD is a commonly offered currency pair representing the New Zealand Dollar or Kiwi and US Dollar. The pair is popular for exposure to a commodity currency, namely the NZD, which helps capture traders’ risk appetite. Like its Antipodean counterpart, the Australian dollar, NZD/USD is seen as carry, in part due to interest rate differentials favoring the NZD. The NZD is the seventh most liquid pair in the world at the time of writing, with the USD being the most liquid pair in the world.
Read this term yesterday. The RBNZ now expects the official exchange rate (OCR) to remain at this restrictive level until at least mid-2024 to ensure inflation
Inflation
Inflation is defined as a quantitative measure of the rate at which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general price level where a given currency is effectively buying less than it has in previous periods. In terms of valuation of strength or currencies, and by extension foreign currencies, inflation or its measures are extremely influential. Inflation stems from the global creation of money. This money is m
Inflation is defined as a quantitative measure of the rate at which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general price level where a given currency is effectively buying less than it has in previous periods. In terms of valuation of strength or currencies, and by extension foreign currencies, inflation or its measures are extremely influential. Inflation stems from the global creation of money. This money is m
Read this term returns to the target range of 1 to 3%.
Today, the pair is down another 1% on the day and is trading at the lowest level since November 11, 2022.
Looking at the daily chart above, price also broke below a swing zone between 0.60559 and 0.60844 (see the red numbered circles and the yellow zone on the chart above). The swing zone dates back to July 2022.
In November 2022, the price was based on this swing zone (see red circles numbered 4, 5 and 6) before moving to the February 2023 high.
Since February, the price has seen a decline that has formed a new high between 0.6363 and 0.6389 (see the numbered green circles on the chart above). The price has been rising and falling since February with a low near 0.60844 and highs near 0.6389. The last 2 days have seen an acceleration down and outside the consolidation range seen since February (see red box in the chart above).
The pair breaks lower. Sellers take more control
The next key target comes against the 50% midpoint of the upside from the 2022 low at 0.60242. Moving below this level opens the door for further downward momentum.
Near risk will now be 0.60559 with additional risk at 0.60844. Sellers looking for more bearish momentum at the breakout of the consolidation range would not want price to move back above the swing low zone (red numbered circles).
.
cnbctv18-forexlive
