- NZD/USD drops gradually from 0.6360 amid recovery in the US Dollar.
- Investors see the Fed reducing interest rates from March 2024.
- NZD/USD delivers a breakdown of the upward-sloping chart pattern.
The NZD/USD pair faces nominal sell-off near 0.6360 as the US Dollar has attempted a recovery move despite thin trading activity. The Kiwi asset struggled to extend recovery as the higher risk-appetite of the market participants is fading away.
The US Dollar Index (DXY) has rebounded to near 101.20 but the broader appeal is still bearish as investors hope that the Federal Reserve (Fed) will start reducing interest rates from March 2024. Consistently easing price pressures and labour market conditions would allow Fed policymakers to endorse rate cut decision.
Next week, further action in the US Dollar will be guided by the Manufacturing PMI and the Employment data for December. While the New Zealand Dollar will be in action due to the release of the Caixin manufacturing PMI data for December.
NZD/USD is at a make or a break level around 0.6300. The asset has delivered a breakdown of the Rising Channel chart pattern formed on an hourly scale. The 20-period Exponential Moving Average (EMA) has started declining, which indicates that the near-term trend has turned bearish.
A range shift move by the Relative Strength Index (RSI) (14) into the 20.00-60.00 region from the bullish territory of 40.00-80.00 indicates a bearish momentum.
Fresh downside move appear if the asset drops below December 25 low at 0.6246. This would expose the asset to November 29 high at 0.6208 and December 14 low at 0.6168.
In an alternate scenario, a recovery move above December 28 high of 0.6370 would drive the asset towards December 26 high near 0.6410. Breach of the latter would open upside for February 2 near 0.6463.
NZD/USD hourly chart
-638394526908378535.png)
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays near 1.0400 in thin holiday trading
EUR/USD trades with mild losses near 1.0400 on Tuesday. The expectation that the US Federal Reserve will deliver fewer rate cuts in 2025 provides some support for the US Dollar. Trading volumes are likely to remain low heading into the Christmas break.
GBP/USD struggles to find direction, holds steady near 1.2550
GBP/USD consolidates in a range at around 1.2550 on Tuesday after closing in negative territory on Monday. The US Dollar preserves its strength and makes it difficult for the pair to gain traction as trading conditions thin out on Christmas Eve.
Gold holds above $2,600, bulls non-committed on hawkish Fed outlook
Gold trades in a narrow channel above $2,600 on Tuesday, albeit lacking strong follow-through buying. Geopolitical tensions and trade war fears lend support to the safe-haven XAU/USD, while the Fed’s hawkish shift acts as a tailwind for the USD and caps the precious metal.
IRS says crypto staking should be taxed in response to lawsuit
In a filing on Monday, the US International Revenue Service stated that the rewards gotten from staking cryptocurrencies should be taxed, responding to a lawsuit from couple Joshua and Jessica Jarrett.
2025 outlook: What is next for developed economies and currencies?
As the door closes in 2024, and while the year feels like it has passed in the blink of an eye, a lot has happened. If I had to summarise it all in four words, it would be: ‘a year of surprises’.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.