The NZD/USD pair dropped yesterday, reaching 0.5505, marking its lowest level since March 19, 2020. It has declined by about 6% from the peak of 0.5852 on April 3, 2025, to the bottom recorded yesterday at 0.5505. The pair has fallen by approximately 1% since the beginning of the year.
Recent New Zealand economic data shows signs of weakness, as:
- The Business Confidence Index declined to 57.5, a decrease from the previous reading of 58.4.
- The Building Permits Index showed a monthly growth of 0.7%, worse than the previous reading of 2.6%.
- The Goods Prices Index showed a monthly contraction of 0.4%, a decrease from the previous reading of 3.0%.
It is worth noting that all financial markets are currently experiencing sharp fluctuations due to the trade war and tariffs imposed by the Trump administration on various countries, as well as retaliatory tariffs. This creates a sense of uncertainty regarding the trade tensions, which could lead to a continuation of the downward momentum for the NZD/USD pair in the coming period.
Markets are awaiting the Reserve Bank of New Zealand’s interest rate decision tomorrow, with expectations of a 25-basis point rate cut from 3.75% to 3.50%. In its last meeting on February 19, 2025, the Reserve Bank of New Zealand reduced interest rates by 50 basis points, from 4.25% to 3.75%, in line with market expectations. This was the fourth consecutive rate cut, following an initial 25 basis point cut, and two subsequent 50 basis point cuts. Expectations point to further rate cuts in the near future.
From a technical perspective, if the support level at 0.5565 for the NZD/USD pair is broken, the pair could target support levels at 0.5478, 0.5419, and 0.5332. On the other hand, if the pair surpasses the support level, it could target resistance levels at 0.5624, 0.5711, and 0.5770. As for the Relative Strength Index (RSI), which currently stands around 42, it indicates negative momentum for the NZD/USD pair. Meanwhile, the MACD indicator shows a bearish crossover between the blue MACD line and the orange signal line, adding further negative momentum for the pair.
Please note that this analysis is provided for informational purposes only and should not be considered as investment advice. All trading involves risk.
