NZDUSD remains within a narrow range as the RBNZ decision approaches: market participants anticipate the OCR will remain unchanged
Market Fundamentals Overview
USD Outlook
In the previous week, the US Non-Farm Payrolls report exceeded expectations, while the Consumer Price Index came in slightly below forecasts. As a result, traders increased their bets on rate cuts, now anticipating 62 basis points of easing by the end of the year. However, the current data does not strongly support this outlook, and further economic releases will be necessary to validate or challenge these market expectations.
With little change to the broader economic narrative, the US dollar traded within a narrow range and showed mixed results against other major currencies. The direction of the greenback will continue to depend on upcoming economic indicators.
This week’s key events are concentrated on Friday, when the US Flash PMIs and fourth-quarter GDP figures will be published. Additionally, a Supreme Court ruling regarding Trump’s tariffs may also be announced.
NZD Perspective
Turning to the New Zealand dollar, the Reserve Bank of New Zealand is widely anticipated to maintain the Official Cash Rate at 2.25% during Wednesday’s meeting. Previously, the central bank signaled a pause in policy changes through 2026, but market participants expect around 37 basis points of tightening by year-end. Recent data has shown consistent improvement, indicating a possible recovery for New Zealand’s economy. Governor Breman has maintained a neutral stance, emphasizing patience and flexibility. The NZD’s recent strength is largely attributed to US dollar softness and its close relationship with the Australian dollar.
NZDUSD Technical Analysis
Daily Chart Overview
The daily timeframe reveals that NZDUSD has been trading sideways near recent highs, following a robust rally at January’s end. This chart offers limited insights, suggesting a closer look at shorter timeframes is needed for more actionable information.
4-Hour Chart Insights
On the 4-hour chart, a significant support area is visible around the 0.5995 mark, which currently underpins the bullish trend. Buyers may find favorable risk-reward opportunities near this level, aiming for a move to fresh cycle highs. Conversely, if the price breaks below this support, sellers could target a decline toward the 0.5928 region.
1-Hour Chart Analysis
The 1-hour timeframe highlights a minor ascending trendline that is guiding the ongoing consolidation. Bulls are likely to defend this trendline, managing risk just below it as they seek further upside. Bears, meanwhile, may wait for a breakdown to pursue moves toward the 0.5995 level. The red lines on the chart indicate today’s average daily range.
Key Events Ahead
- Wednesday: RBNZ policy announcement and FOMC meeting minutes.
- Thursday: Release of the latest US Jobless Claims data.
- Friday: US Q4 GDP, December PCE price index, US Flash PMIs, and a possible Supreme Court decision on Trump’s tariffs.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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