New Zealand Dollar Talking Points
NZD/USD[1] appears to be stuck in a narrow range after giving back the advance following the Reserve Bank of New Zealand (RBNZ) interest rate decision[2], and the exchange rate may continue to consolidate as the Relative Strength Index (RSI) falls back from overbought territory to indicate an exhaustion in the bullish price action.
NZD/USD Reverses Ahead of 50-Day SMA with Positive Slope Still Intact
NZD[3]/USD[4] struggles to retain the rebound from the weekly low (0.7209) as the US Dollar[5] appreciates on the back of waning investor confidence, and it remains to be seen if the update to the US Non-Farm Payrolls (NFP[6]) report will influence the exchange rate as the ADP Employment survey shows a 117K expansion in February versus projections for a 177K rise.
The NFP report may show a similar development as the previous figures showed the US economy adding 49K jobs in January versus projections for a 50K rise, and a below-forecast print for February may trigger a bearish reaction in the US Dollar as it puts pressure on the Federal Reserve to provide additional monetary support.
However, it seems as though the Federal Open Market Committee[7] (FOMC) is in no rush to switch gears as Governor Lael Brainard[8] insists that “the economy remains far from our goals in terms of both employment and inflation,” and key market themes may influence NZD/USD ahead of the next Fed interest rate decision on March 17 as the US Dollar continues to reflect an inverse relationship with investor confidence.
In turn, the break above the 2018 high (0.7437) suggests the broader trend remains intact for NZD/USD as the 50-Day SMA (0.7206)
