Nzdusd Shows Volatility

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Nzdusd Shows Volatility

Nzd/Usd Shows Volatility Around 0.6070

NZD/USD is trending lower and is seen trading around 0.6070 on Thursday. The recent drop in the NZD/USD is partially due to the appreciation of the DXY, which has recovered from its 4-month lows of around 103.70.

Despite the downtrend in the NZD/USD, the USD's outlook is still uncertain in the short term. The reason for this is the forecast of a rate cut at the Federal Reserve's September meeting.

Rising Odds Of Rbnz Rate Cut

According to experts, the recent CPI print for June was enough to provide confidence to the Federal Reserve officials. Many market players now believe that a cut to the interest rate is now a requirement.

Recently, Fed Barkin also classified the disinflation trend as encouraging and talked about how they will discuss whether the inflation is still elevated at these levels or not.

Meanwhile, the speculation regarding an early rate cut by the RBNZ is catching steam. This is yet another reason why we are seeing the recent selling in the NZD/USD.

The prospects of a rate cut by the RBNZ (Reserve Bank of New Zealand) have increased as data shows a slowdown in the economy during Q2 2024.

Quarterly inflation in New Zealand during Q2 was 0.4%, lower than the 0.6% reading of Q1. Similarly, the CPI data (yearly) has also gone down from 4.0% to around 3.5%.

For now, NZD/USD is oscillating in its daily range, which was established on Wednesday, with the first support at 0.6035.

Similarly, the short-term outlook of NZD/USD is also bearish as it is trading below 0.6100, the location of the 20 EMA. Additionally, the RSI also hints at the indecision of the market players as it is hovering in the 40 - 60 range.

break of 0.6130 will be a sign of trend change and will enable the NZD buyers to take the pair toward the 0.6170 level. Conversely, a break of 0.6050 will send us toward the next target at 0.6000, which is also important support.

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