EURNZD Forecast – Rising Yields in NZ Bonds

Share

In today’s comprehensive EURNZD forecast, we will first examine New Zealand’s current economic conditions. Then, we will meticulously examine the EURNZD pair’s technical analysis.

EURNZD Forecast – Rising Yields in NZ Bonds

Reuters — Transitioning into the new week, New Zealand’s 10-year government bonds yield has ascended further, marking a consecutive increase as it approaches its highest point in nearly 13 years. This uptick to 5.530% reflects market anticipations that the Reserve Bank of New Zealand (RBNZ) will persist with its stringent stance on interest rates in the upcoming November policy assembly—the final one for the current year.

In early October, the RBNZ maintained the benchmark borrowing costs at 5.5% for the third consecutive session. However, officials signaled a resolve to keep interest rates elevated for an extended period. The central bank’s commitment is to ensure that inflation reverts to the targeted annual bracket of 1% to 3%, necessitating a prolonged period of restrictive monetary policy.

Investors’ eyes now turn to China’s Purchasing Managers’ Index (PMI) data, which will be released this week. This holds particular significance as China is a principal trading ally for New Zealand, and there’s a growing concern that the continuing real estate market issues might hinder China’s economic rebound.

Meanwhile, in the United States, the yield on the 10-year Treasury note has seen a minor decline as market participants brace for the Federal Reserve’s imminent monetary policy announcement. This comes amidst increasing evidence suggesting the U.S. economy’s robustness, potentially influencing global yield trajectories, including New Zealand’s government bonds.

EURNZD Forecast: Bullish Momentum

The EURNZD currency pair has been capturing the attention of forex traders as it continues to show strength within a bullish channel. Recent trading activity has signaled a positive outlook, with the pair successfully breaking above a critical pivot point. Today’s notable shift has seen the EURNZD climb above the 1.817 pivot level, which could entice bullish traders to consider potential gains in the near term.

The technical analysis of EURNZD suggests that bulls may have the upper hand for the time being. The Relative Strength Index (RSI), a key momentum indicator, maintains its position above the 50 line, often interpreted as a bullish signal. Moreover, a minor divergence is observed in the RSI, which could indicate a further strengthening of the bullish momentum.

EURNZD Forecast - Rising Yields in NZ Bonds

EURNZD Forecast – Rising Yields in NZ Bonds – 4H Chart

Should the bulls maintain control, there’s a strong possibility that we may witness the EURNZD pair advancing toward the first resistance (R1) at 1.828.

EURNZD Forecast: The Support Levels to Watch

Traders are keen on support levels that could underpin the current bullish trend. The immediate support for EURNZD is identified at the 1.807 mark. This level is crucial for traders, as a dip below this could negate the current bullish scenario, introducing a potential shift in market sentiment.

It’s important for those trading the EURNZD pair to consider the invalidation point of the current bullish outlook. If prices were to decline below the aforementioned support level at 1.807, the bullish perspective could be compromised, potentially leading to a reassessment of the market’s direction.

  • 30 October 2023