Nzdusd Holds Its Ground

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Nzdusd Holds Its Ground

Nzd/Usd Holds Its Ground Above 0.6100

NZD/USD continues to develop higher after staging a breakout overnight. The NZD/USD has already crossed the 200 SMA, a sign that the trend now favors the bulls.

Now, it seems that the NZD/USD pair is trying to close its 3rd day in green. From the way it looks, it seems that NZD/USD will have no trouble closing today's session in green.

Nzd/Usd Trades At 6-Week High

As of now, NZD/USD is sitting comfortably at 6-week highs near the 0.6130 handle. The 0.6100 handle which was once a resistance is now serving as support for the NZD bulls.

It seems that investors are no longer paying attention to the dovish tilt of the RBNZ. Instead, the increased prospects of stimulus from China and the risk-on mood have lifted the NZD/USD pair higher.

Conversely, the US Dollar has moved lower to the same levels seen during January 2024. On the US front, the market is now almost certain that the rate-cutting cycle will start in September 2024. So, that's yet another reason for the NZD/USD to turn higher.

By the end of 2024, the US Federal Reserve will likely cut the policy rate by 200 bps. At least, that's the thinking of the economists, and this is reaffirmed by the FOMC members in their comments and speeches.

Now, it seems that the USD traders are not waiting for more cues to get an idea of the exact extent of the rate cuts. Meanwhile, the geopolitical risk is also at record highs which is limiting the upside in the NZD/USD.

As far as the economic calendar is concerned, there's no big news from the USA. That's why the price dynamics of the USD will continue to be a driver for the NZD/USD.

However, Powell will be giving a speech on Friday which could have some serious implications for the greenback. In turn, this will affect the near-term trend of the NZD/USD.

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