NZD/USD Price Analysis: Posts fresh 10-week high near 0.6160 on China’s fresh stimulus
|- NZD/USD strengthens on weak US Dollar and China’s announcement of stimulus to revive property sector.
- Market speculation for Fed reducing interest rates from September has weakened.
- NZD/USD approaches the crucial resistance of 0.6220.
The NZD/USD pair refreshes its 10-week high at 0.6165 in Tuesday’s European session. The Kiwi asset strengthens on multiple tailwinds such as soft US Dollar and China’s announcement of fresh stimulus measures to boost demand for its beleaguered housing sector.
The US Dollar Index (DXY), which tracks the US Dollar’s value against six major currencies, has extended its downside to 104.50. The US Dollar fails to capitalize on diminished expectations over the Federal Reserve (Fed) starting to reduce interest rates from the September meeting. The decline in market speculation for Fed rate cuts in September is the outcome of a strong United States (US) economic outlook and policymakers’ hawkish stance on the interest rate outlook.
Meanwhile, the New Zealand Dollar strengthened after China’s Shanghai announced several measures to revive the housing sector from the crisis. The administration acknowledges cutting down payment requirements, lowering minimum mortgage rates, and restrictions on home purchases will be eased. Being a proxy to China’s economy, the appeal for the New Zealand Dollar improves.
On the domestic front, investors await the NZ Budget Release that will indicate the scale of spendings, borrowing and revenue collection by the government.
NZD/USD is approaching the horizontal resistance plotted from February 22 high around 0.6220. The Kiwi asset strengthened after a bullish crossover of the 20 and 50-day Exponential Moving Averages (EMAs) around 0.6020, which suggested that a bullish trend has been triggered.
The 14-period Relative Strength Index (RSI) shifts comfortably into the bullish range of 60.00-80.00, indicating that the momentum has leaned toward the upside.
An upside move above the round-level resistance of 0.6200 will drive the asset January 15 high near 0.6250, followed by January 12 high near 0.6280.
On the contrary, fresh downside would appear if the asset breaks below April 4 high around 0.6050 This would drag the asset towards the psychological support of 0.6000 and April 25 high at 0.5969.
NZD/USD daily chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.