NZDUSD on Friday rose 1.12% to 0.60520. Week ending 2024-08-16 rose 0.95%. What’s going on.

NZDUSD Analysis

Performance
Period	Pct	Chg	Momentum
Friday	1.12%	67.2 Pips
Week 2024-08-16	0.95%	57.1 Pips	August	1.68%	100.2 Pips

Upcoming key events for the new week (London Time)

Wed 07:00 PM FOMC Meeting Minutes
Thu 01:30 PM Initial Unemployment Insurance Claims
Thu 11:45 PM Retail Trade Turnover (3-mth)
Fri 03:00 PM Jackson Hole Symposium
Fri 03:00 PM Federal Reserve Chair Jerome Powell speech (Jackson Hole Symposium)

What happened over the week

In the United States, several economic indicators showed mixed outcomes. The University of Michigan’s Consumer Sentiment Index for August rose to 67.8 points from 66.4 in July, indicating a slight improvement in consumer confidence. However, the housing market presented weaker data; July Housing Starts fell to 1.238 million from June’s 1.353 million, and Building Permits dropped to 1.396 million from a revised 1.454 million in June. On the positive side, U.S. Retail Sales increased by 1% month-over-month in July, a significant improvement from a stagnant 0% in June, according to the Census Bureau. Initial Unemployment Insurance Claims fell to 227,000 for the week ending August 10, down from the previous 234,000. Inflation showed mixed signals; monthly CPI inflation increased to 0.2% in July from -0.1% in June, but the annual rate eased slightly to 2.9% from 3% in June, as per the Bureau of Labor Statistics. Producer Price Index (PPI) data also indicated softening; the PPI excluding Food and Energy stood at 0% for July, down from a revised 0.3% in June, while the annual PPI fell to 2.2%, down from June’s revised 2.7%.

In New Zealand, the Reserve Bank of New Zealand (RBNZ) decided to lower the Official Cash Rate to 5.25%, falling short of market expectations and a previous rate of 5.5%. This move aims to counteract slowing economic activity and control inflation within the target range.

The recent data releases and RBNZ’s decision have implications for the NZDUSD currency pair. The increment in U.S. Consumer Sentiment and a significant rise in U.S. Retail Sales underscore stronger U.S. economic conditions, which typically support the USD. However, the U.S. housing sector’s slump and mixed inflation data could offset some of this strength. Conversely, the RBNZ’s rate cut could weaken the NZD as lower interest rates generally reduce investment returns, making the currency less attractive. Despite these factors, NZDUSD rose by 1.12% on Friday to 0.60520 and gained 0.95% for the week ending August 16, possibly indicating market reactions to other factors such as anticipated future policies or shifts in global risk sentiment. In summary, while U.S. data showcases a robust yet mixed economic scenario, the RBNZ’s dovish stance may create downward pressure on the NZD, but recent market movements suggest other dynamics at play.

From X (Twitter)

Latest release: Unemployment rate at 4.6 percent.https://t.co/PCfNIzjytY pic.twitter.com/c1bIgYC5zA

— Stats NZ (@Stats_NZ) August 6, 2024

What can we expect from NZDUSD for the new week and what happened on Friday?

NZDUSD on Friday rose 1.12% to 0.61. Price is above 9-Day EMA while Stochastic is falling. For the week ending 2024-08-16, the pair rose 0.95% or 57.1 pips higher.

Looking ahead, NZDUSD looks bullish as the pair ended higher after Friday trading session.

For the new week, our technical outlook looks bullish, immediate upside resistance level at 0.61 (WR1) with break above could target 0.61 (WR2). On the downside, we are looking at week low of 0.60 as an important support. Break below this level could weaken the current bullish momentum. A break above 0.61 would suggest bullish bias after recent positive movement.

For the month of August, NZDUSD is up by 1.68% or 100.2 pips higher.

Weekly key levels to watch out:

You might also be interested in:

New Residential Construction Source: Census Bureau
Manufacturing and Trade Inventories and Sales Source: Census Bureau
Advance Monthly Sales for Retail and Food Services Source: Census Bureau
Advance Monthly Sales for Retail and Food Services Source: Census Bureau
Business Formation Statistics Source: Census Bureau
OCR 5.25% – Monetary restraint tempered as inflation converges on target Source: RBNZ