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New Zealand Real Estate Market Under Pressure

1/10/2023 12:04 PM

Against the depreciation of the US dollar, the NZD/USD pair is correcting near 0.6370.

According to a report by the Real Estate Institute of New Zealand (REINZ), in almost all regions of the country, there is a drop in demand for housing, but in some of them, the supply has more than doubled: in Coromandel, the figure rose by 175.3%, in Nelson and Bays – by 147.2%, and in Taranaki, the growth was 118.6%. According to analysts, the mortgage rate, which peaked at 6.75% in November and 4.73% in December, had a key influence on the current market trend, making the cost of borrowing very high for the people.

Quotes of the US dollar are falling, trading at 102.900 in the USD Index. Investors assess the impact of Friday's statistics, which showed a reduction in wages to 4.8% from 5.0% a month earlier, indicating the negative impact of the "hawkish" monetary policy on the country's economy. Experts suggest that in this situation, the US Federal Reserve will have to slow down the pace of interest rate increases: for example, annual futures for the indicator fell by 10.3 basis points in just a few days.

The trading instrument began to form a local corridor, which can work as a Flag trend continuation pattern.

Technical indicators are ready to reverse and give a buy signal: fast EMAs on the Alligator indicator are approaching the signal line, and the AO oscillator histogram entered the buy zone, forming several upward bars.

Resistance levels: 0.6410, 0.6566. | Support levels: 0.6290, 0.6100.

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