The NZD/USD pair has seen an increase in value, reaching a three-week high of 0.6030 in Monday’s North American session. This rise can be attributed to the strong performance of the New Zealand Dollar (NZD) ahead of the Reserve Bank of New Zealand’s (RBNZ) monetary policy announcement set to take place on Wednesday.
It is widely expected that the RBNZ will maintain its Official Cash Rate (OCR) at 5.5%. As a result, investors will be closely watching for any interest rate guidance provided by the central bank. Analysts are divided on whether there will be a rate cut in August, with some favoring a slight rate reduction to prevent further economic slowdown, while others are looking for more evidence of inflation easing.
On the other hand, the US Dollar (USD) is currently trading sideways, with the focus being on the US Consumer Price Index (CPI) data for July, which is scheduled to be released on Wednesday. The US Dollar Index (DXY) is holding steady above 103.00, and the next move in the USD will likely be influenced by the CPI data.
The NZD/USD pair is facing resistance in the 0.6037-0.6046 range, but has managed to climb above the 20-day Exponential Moving Average (EMA) around 0.5990, indicating a bullish near-term outlook. The asset is aiming to stabilize above the 50-day EMA at 0.6030. The 14-day Relative Strength Index (RSI) has returned to a neutral zone, suggesting that bearish momentum has subsided.
If the asset manages to break above the May 3 high of 0.6046, it could see further gains towards the July 17 high near 0.6100 and the July 12 high of 0.6127. Conversely, a downward move below the April 19 low at 0.5850 could push the asset towards the support level of 0.5800 and the October 26, 2023 low at 0.5770.
Overall, the NZD/USD pair is currently in a bullish trend, with the RBNZ monetary policy announcement and US CPI data likely to impact its future movements. Investors will be closely monitoring these developments to make informed trading decisions in the Forex market.
