NZD/USD Price Forecast: Bulls eye a break above 200-day SMA
The New Zealand Dollar advances on Monday and trades near its daily close at around 0.5840 as Tuesday’s Asian session begins. Yesterday, the pair gained 0.20% but key resistance lies overhead with the 200-day Simple Moving Average (SMA) at 0.5848.
  • Kiwi buyers target a close above the 200-day SMA at 0.5848 to trigger a bullish extension.
  • Failure to reclaim the level may invite renewed selling pressure toward 0.5810 and the 0.5750 swing low.
  • Momentum remains neutral-to-bearish, suggesting hesitation among buyers ahead of Tuesday’s trading session.

The New Zealand Dollar advances on Monday and trades near its daily close at around 0.5840 as Tuesday’s Asian session begins. Yesterday, the pair gained 0.20% but key resistance lies overhead with the 200-day Simple Moving Average (SMA) at 0.5848.

NZD/USD Price Forecast: Technical outlook

The technical picture shows the pair is neutral to downward biased, but a daily close above the 200-day SMA could open the door for further upside. If cleared, the next resistance would be the 20-day SMA at 0.5867 followed by the 50-day SMA at 0.5886 and the 100-day SMA at 0.5947.

Conversely, if NZD/USD stays below the 200-day SMA and bears drive prices lower, they would face key support at the October 6 low of 0.5810. A breach of the latter will expose the 0.5800 mark, followed by the September 26 swing low of 0.5754.

NZD/USD Price Chart – Daily

New Zealand Dollar FAQs

The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.

The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.

Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.

The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.

 

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