NZD/USD Price Forecast: Delivers H&S breakdown ahead of US NFP data

New Zealand Dollar Price Today

The table below shows the percentage change of New Zealand Dollar (NZD) against listed major currencies today. New Zealand Dollar was the weakest against the US Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.05%	0.13%	0.38%	0.10%	0.29%	0.36%	0.04%
EUR	-0.05%		0.07%	0.33%	0.05%	0.25%	0.32%	-0.01%
GBP	-0.13%	-0.07%		0.27%	-0.03%	0.17%	0.23%	-0.09%
JPY	-0.38%	-0.33%	-0.27%		-0.29%	-0.10%	-0.04%	-0.36%
CAD	-0.10%	-0.05%	0.03%	0.29%		0.19%	0.25%	-0.06%
AUD	-0.29%	-0.25%	-0.17%	0.10%	-0.19%		0.06%	-0.26%
NZD	-0.36%	-0.32%	-0.23%	0.04%	-0.25%	-0.06%		-0.32%
CHF	-0.04%	0.01%	0.09%	0.36%	0.06%	0.26%	0.32%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the New Zealand Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent NZD (base)/USD (quote).

In Friday’s session, the major driver for the Kiwi pair will be the United States (US) Nonfarm Payrolls (NFP) data for December. The impact of the US NFP data will be significant on expectations for the Federal Reserve’s (Fed) monetary policy outlook, as officials, including Chairman Jerome Powell, have expressed concerns over weakening job growth in their latest speeches.

The US NFP report is expected to show that the economy added 60K fresh workers, slightly lower than 64K in November. The Unemployment Rate is estimated to drop to 4.5% from the prior reading of 4.6%.

Ahead of the US NFP data, the US Dollar trades firmly, with the US Dollar Index (DXY) refreshing four-week high near 99.00.

NZD/USD technical analysis

NZD/USD declines to near 0.5730 on Friday. The outlook of the pair has turned bearish as the pair has delivered a breakdown of the Head and Shoulder (H&S) formation after sliding below the neckline at 0.5740.

The 14-day Relative Strength Index (RSI) at 41.67 (neutral-bearish) confirms waning momentum and a loss of upside drive.

The 20-day Exponential Moving Average (EMA) has rolled over to 0.5772 and slopes lower, keeping the pair capped beneath its short-term trend filter.

Trend signals have weakened as the previously rising 20-day EMA flattened and turned down, indicating a shift toward a corrective phase. Sustained trade beneath the indicator keeps risk skewed to the downside, and could lead to further downside towards the November 14 high of 0.5692. Alternatively, a recovery move above the 20-day EMA could support further upside towards the December high around 0.5850.

(The technical analysis of this story was written with the help of an AI tool.)

US Dollar FAQs

What is the US Dollar?

The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.

How do the decisions of the Federal Reserve impact the US Dollar?

The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.

What is Quantitative Easing and how does it influence the US Dollar?

In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.

What is Quantitative Tightening and how does it influence the US Dollar?

Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.

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