New Zealand Dollar Firm Above Support

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New Zealand Dollar Firm Above Support

New Zealand Dollar (Nzd) Firm Above 0.6000

The New Zealand Dollar (NZD) remains supported above the 0.6000 handle on Monday. It seems that the NZD/USD is gaining traction because there are now fewer chances of a rate cut by the RBNZ during the August meeting.

The drop in the prospects of a rate cut by the Reserve Bank of New Zealand came after a strong employment report. Also, the CPI from China helped boost the NZD, which is yet another reason why the NZD/USD has been gaining traction lately.

Nzd Faces Multiple Headwinds

Despite all of this, there are many headwinds for the NZD, such as high geopolitical risks and an increase in volatility. Now, traders are waiting for the official decision from the RBNZ regarding the rate cut before placing long-term trades.

On the USA side, a lot of economic releases are lined up such as the CPI, PPI, and the US retail sales data. These data releases will be made public this week and can significantly alter the trend of the NZD/USD.

The bottom line is that the New Zealand Dollar (NZD) will be positive on Monday, while the long-term trend will remain bearish. For starters, the NZD/USD is still below the 100 EMA on the D1 chart, while the RSI (14) shows a reading in the neutral zone near 50 (midline).

The technical indicators show that the NZD/USD is going through a phase of consolidation before moving either up or down.

If the NZD bulls aim higher, the first roadblock will be 0.6050, where the 100 EMA is present. After that, the next key levels to watch are 0.6080 and then 0.6134. If the NZD/USD turns lower, it will be a sign of the US Dollar demand and will send the pair lower towards 0.5912.

Right now, there's around a 50% chance that the RBNZ will keep the rate unchanged at 5.5% at the upcoming meeting. However, the members of the NZIER Shadow Board are split on the decision to lower the rate at the next meeting.

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