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NZDUSD Market Analysis

1/30/2023 1:45 PM

Against the rising consumer inflation in New Zealand, the NZD/USD pair grows around 0.6500.

Thus, the Q4 consumer price index amounted to 7.2% YoY, higher than the forecast of 7.1% and in line with the previous period's value, and increased by 1.4% QoQ, more than the expected 1.3%. The Reserve Bank of New Zealand is failing to bring inflationary risks under control, and investors expect officials to take more decisive steps against monetary policy. At the next meeting on February 22, the regulator will likely raise the interest rate by 0.25–0.50%, giving a new positive impetus to the national currency.

This week, the market is focused on the US Federal Reserve meeting: analysts predict a 25.0 basis point hike in interest rates to 4.75%, which may cause a correction in the NZD/USD pair to 0.6310, otherwise the breakout of the resistance level 0.6500 and growth to 0.6600 is expected.

The long-term trend is upward, and within it, the quotes have reached 0.6500, which has not yet been broken, indicating a possible correction to 0.6310 and 0.6210, after which long positions with the target at 0.6600 are relevant.

The medium-term trend is upward, with the target around zone 2 (0.6569–0.6551). At the moment, the price is slightly retreating from its local highs, and the correction may reach the key trend support 0.6350–0.6332, after which it is worth considering buying with the target at the January high of 0.6527.

Resistance levels: 0.6500, 0.6600, 0.6750. | Support levels: 0.6310, 0.6210, 0.6085.

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