12 Feb 2025

NZD/USD currency pair is trading around the 0.5900 level, exhibiting a bearish trend within a descending channel. The pair has been facing downward pressure, with key technical indicators suggesting continued weakness.

Key Support Levels:

• 0.5850: This level has been identified as a significant support zone. A decisive break below this could lead to further declines.

• 0.5772: This marks a two-year low reached in November 2023. If the bearish momentum persists, this level may be tested again.

Key Resistance Levels:

• 0.5907 (Nine-day EMA): The immediate resistance is at the nine-day Exponential Moving Average. A break above this could indicate a potential shift in momentum.

  
  

• 0.5926 (14-day EMA): Further resistance is seen at the 14-day EMA, which aligns with the upper boundary of the descending channel. A move above this level could signal a bullish reversal.

Technical Indicators:

• Relative Strength Index (RSI): The 14-day RSI remains below the neutral 50 level, indicating prevailing bearish sentiment. A move above 50 would be needed to confirm a shift to bullish momentum.

In summary, the NZD/USD pair is currently exhibiting a bearish bias, with key support levels at 0.5850 and 0.5772. Overcoming resistance at the nine-day and 14-day EMAs could pave the way for a bullish reversal. Traders should monitor these levels closely for potential trading opportunities

The NZD/USD pair is experiencing slight gains, trading around 0.5655 during the early hours of the Asian session on Wednesday. The New Zealand Dollar (NZD) is showing strength as concerns regarding tariffs begin to diminish. Nevertheless, investors remain vigilant regarding any developments related to potential tariff policies. Later on Wednesday, attention will shift to the US Consumer Price Index (CPI) inflation data.

In his prepared remarks for the first day of his testimony on the semi-annual Monetary Policy Report before the Senate Banking Committee, Federal Reserve (Fed) Chair Jerome Powell emphasized that Fed officials do not need to rush into adjusting monetary policy. "We can maintain policy restraint for longer if the economy remains strong and inflation does not move toward 2%,” Powell stated. However, these comments did not provide a significant boost to the US Dollar, as they were largely anticipated by market participants.

On Monday, US President Donald Trump announced a 25% tariff on all steel and aluminum imports into the United States, with no exceptions. Additionally, last week, he imposed a 10% import tax on Chinese goods, raising concerns about a potential economic slowdown in China, which is a key trading partner for New Zealand. Investors are looking for more definitive information regarding additional trade tariffs from the Trump administration. Any indications of escalating trade tensions could negatively impact the Kiwi against the USD.

Helen Given, an FX trader at Monex USA in Washington, remarked, "What we're seeing now is that those headlines and those announcements are not necessarily an indication that these tariffs are actually going to be levied, at least not at the time that we think that they might be. So, everyone is just in a wait and see mode.”