22 Oct 2024
CURRENT;-0.61200
TARGET;- 0.59500
STOPLOSS;-0.60542
OVERVIEW
ü The
NZD/USD pair is experiencing a slight rebound from the 0.6020 level, marking
its lowest point since August 16, which was reached earlier this Tuesday. It
has maintained its intraday gains throughout the first half of the European
session. Currently, spot prices are hovering around the 0.6060 mark, reflecting
a 0.45% increase for the day, supported by a weaker US Dollar (USD).
ü The USD Index (DXY), which measures the performance of the Greenback against a range of currencies, has retreated from its highest point since early August, as buyers take a pause following a robust rally that began at the start of this month. Nevertheless, the growing consensus that the Federal Reserve (Fed) will implement modest rate cuts is likely to prevent any significant decline in the USD. Coupled with expectations of aggressive rate cuts from the Reserve Bank of New Zealand (RBNZ) and a softer risk sentiment, this scenario is expected to limit the upside potential for the risk-sensitive NZD/USD pair.
TECHNICAL ANALYSIS
From a
technical standpoint, the recent decline below the significant 200-day Simple
Moving Average (SMA) has been interpreted as a new signal for bearish traders.
Additionally, the oscillators on the daily chart remain firmly entrenched in
negative territory and have not yet approached oversold levels. This indicates
that the most likely direction for the NZD/USD pair is downward. Consequently,
any potential upward movement may be viewed as a chance to sell near the 0.6100
round-number level, which is expected to serve as a crucial pivot point.