On Thursday, the New Zealand dollar remained weak, trading around $0.586 against the Greenback. Investors anticipate that the Reserve Bank of New Zealand (RBNZ) might adopt a more relaxed monetary policy at its meeting next week.
Up to 75 Basis Point Cut Looms for NZ
Specifically, markets fully expect a 50 basis point interest rate cut and see a 26% chance of a larger 75 basis point reduction, which would lower the cash rate to 4.75%. This expectation shift came after the New Zealand Treasury released a pessimistic economic outlook, warning that the anticipated recovery could be delayed.
The New Zealand dollar is also facing extra pressure because the U.S. dollar is strengthening. This is due to speculation that the Federal Reserve may decide not to cut interest rates in December.
NZDUSD Technical Analysis – 21-November-2024
The currency pair in discussion trades bearishly below the 50- and 100-period simple moving averages. Yesterday, the downtrend was triggered when the bulls failed to stabilize NZD/USD above the key resistance level of $0.591.
The technical indicators, the Stochastic and RSI depict 24 and 40 in the description and decline, respectively. This interprets that NZD/USD is not oversold; therefore, the downtrend should resume.
- Good reads: Watch USDILS Break 3.77 for Bullish Climb
NZDUSD Price Forecast – 21-November-2024
The trend outlook remains bearish, with prices below $0.595, backed by the 100-period simple moving average. In this scenario, the next bearish target could be the 0.577 mark, the October 23 low.
Please note that the downtrend strategy should be invalidated if NZD/USD prices exceed $0.595.
J.J Edwards is a finance expert with 15+ years in forex, hedge funds, trading systems, and market analysis.
