As the New Zealand dollar continues to rise against the US dollar, reaching 0.6014, all eyes are on the upcoming Reserve Bank of New Zealand (RBNZ) meeting. Analysts predict that the official cash rate will remain at 5.5%, marking the ninth consecutive time without a change. Concerns about the strength of New Zealand’s economy persist, with recent data presenting a mixed economic outlook. Despite a lower-than-expected increase in the unemployment rate in Q2, inflation expectations for Q3 have reached a three-year low. The combination of these factors suggests a potential for rate cuts, although it is unlikely that the RBNZ will make any adjustments in August. The central bank seems to be waiting for signals from major global central banks before taking any further action.
Investor attention is shifting towards upcoming US inflation data, which could impact global monetary policy expectations, particularly regarding the Federal Reserve. Even with challenges in July and August, the New Zealand dollar has displayed resilience, hinting at stability in the near future unless there are significant external disruptions.
Looking at the charts, the NZD/USD pair is currently in a consolidation phase above the 0.5983 level. There is a possibility of an extension towards 0.6050, which would be considered a corrective move. Subsequently, the market may trend downward to 0.5920 after this correction. A breach of the 0.5920 level could signal a further decline towards 0.5800. The MACD indicator supports this bearish outlook, as it is pointing downwards despite being above zero, indicating potential selling pressure.
On the hourly chart, the NZD/USD is in the final stages of a growth wave targeting 0.6050. This rally is expected to be a corrective move, potentially leading to a reversal towards 0.5983 and further downward movement to 0.5920. The Stochastic oscillator also aligns with this bearish scenario, showing signs of an upcoming downturn despite currently being above 80.
The New Zealand dollar’s performance against the US dollar is influenced by various economic factors, both domestically and globally. The upcoming RBNZ meeting and US inflation data will be critical in shaping market expectations and the future direction of the NZD/USD pair.