Nzdusd To Move Lower

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Nzdusd To Move Lower

Nzd/Usd To Move Lower Towards 0.5770

NZD/USD has lost some of its ground after making a yearly high near 0.5820. Overall, the NZD/USD pair appears to be on the back foot as the US Dollar is performing strongly. This comes as the markets expect the Fed to back down or at least scale down its rate-cut policy.

According to Deutsche Bank's analysts, the US central bank is highly likely to go on an extended pause. This is in regard to the Fed's rate cut policy. In other words, the analysts believe the rate will remain above 4.00% as we go through 2025.

Trump'S Actions To Support Us Dollar

This comes as Trump is expected to go through with transformative changes. Including higher tariffs on China, the Eurozone, and the rest of the world. These tariffs will directly lead to higher inflation in the USA. As a result, analysts believe that inflation will remain above 2.5% even in 2026.

At the upcoming December meeting, there's a 59% chance the Federal Reserve will lower the rate by 0.25%. This will lower the policy rate to around 4.25 - 4.50%.

If we look at the New Zealand side, the focus has shifted to the upcoming RBZ monetary policy meeting. The Reserve Bank of New Zealand is forecasted to cut the rates by 0.50%. This will lower the interest rate in New Zealand to around 4.25%.

Overall, that will be the 3rd rate cut in a row by the RBNZ and the 2nd instance of a 0.50% rate cut. That's why if we look at the NZD/USD, it has closed the 3rd day in red with the 20 EMA hovering near 0.5930.

The RSI (14) indicator on the NZD/USD chart also appears to be hovering in the 20 - 40 range. This is a sign that the bearish pressure in NZD/USD is still intact.

The NZD/USD pair is expected to move lower towards 0.5770, which is the lowest from October 2023. Below that, the 0.5700 support is present followed by the next one at 0.5600.

On the other hand, a move above the 0.5970 will mean the NZD bulls are back in action. In that case, the next target for the NZD bulls will be the 0.6000 handle.

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