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NZD: NZD/USD Edges Higher, Testing 20-Day EMA

NZD
USNew ZealandNorth AmericaBulletAPACForeign Exchange BulletsMarkets
  • NZDUSD rose 0.25% to 0.5655 on Tuesday and is testing the 20-day EMA at 0.5653, a key resistance level. The move was largely on the back of USD weakness as Powell signaled patience before further rate cuts, prompting a 0.3% decline in the BBDXY.
  • A sustained move above this mark could strengthen the bullish outlook, while failure to hold may lead to renewed selling pressure. The RSI has risen to 51, indicating improving sentiment, but the flat MACD histogram suggests limited bullish momentum. Key support levels are seen at 0.5620 and 0.5600.
  • The RBNZ is expected to maintain its easing bias next week due to labor market weakness, with markets anticipating further rate cuts beyond the 125bps already delivered. Additionally, concerns over inflationary pressures from Trump's newly imposed tariffs on steel and aluminum are adding uncertainty to the markets.
  • Westpac now expects NZ inflation to peak at 2.7% in Q3 2025, up from its previous estimate of 2.3%, driven by NZD depreciation and higher import costs, including gasoline. Inflation is projected to ease to 2.6% in Q4 2025 and reach 2% by Q4 2026. The RBNZ is expected to cut the OCR to 3.75% next week and to 3.25% in Q2 2025 but may start tightening again in Q2 2026. Westpac warns that the inflation rebound could be a concern for the RBNZ after its efforts to bring it back to target, as per BBG.
  • Expiries: 0.5760 (NZD411.1m), 0.5725 (NZD399.9m), 0.6300 (NZD301.6m). Upcoming notable strikes: 0.5580 (NZD308.9m Feb. 14)
  • RBNZ dated OIS pricing is holding steady across the next few meeting, The market is pricing in a 88% chance of a 50bps cut for Feb, another 25bps cut priced for April, and cumulative 123bps of cuts by Nov 2025, down from 135bps last Wednesday
  • There is nothing on the local calendar today
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  • NZDUSD rose 0.25% to 0.5655 on Tuesday and is testing the 20-day EMA at 0.5653, a key resistance level. The move was largely on the back of USD weakness as Powell signaled patience before further rate cuts, prompting a 0.3% decline in the BBDXY.
  • A sustained move above this mark could strengthen the bullish outlook, while failure to hold may lead to renewed selling pressure. The RSI has risen to 51, indicating improving sentiment, but the flat MACD histogram suggests limited bullish momentum. Key support levels are seen at 0.5620 and 0.5600.
  • The RBNZ is expected to maintain its easing bias next week due to labor market weakness, with markets anticipating further rate cuts beyond the 125bps already delivered. Additionally, concerns over inflationary pressures from Trump's newly imposed tariffs on steel and aluminum are adding uncertainty to the markets.
  • Westpac now expects NZ inflation to peak at 2.7% in Q3 2025, up from its previous estimate of 2.3%, driven by NZD depreciation and higher import costs, including gasoline. Inflation is projected to ease to 2.6% in Q4 2025 and reach 2% by Q4 2026. The RBNZ is expected to cut the OCR to 3.75% next week and to 3.25% in Q2 2025 but may start tightening again in Q2 2026. Westpac warns that the inflation rebound could be a concern for the RBNZ after its efforts to bring it back to target, as per BBG.
  • Expiries: 0.5760 (NZD411.1m), 0.5725 (NZD399.9m), 0.6300 (NZD301.6m). Upcoming notable strikes: 0.5580 (NZD308.9m Feb. 14)
  • RBNZ dated OIS pricing is holding steady across the next few meeting, The market is pricing in a 88% chance of a 50bps cut for Feb, another 25bps cut priced for April, and cumulative 123bps of cuts by Nov 2025, down from 135bps last Wednesday
  • There is nothing on the local calendar today