NZD/USD bounces back post RBNZ decision, kiwi finds respite on soft USD
- NZD/USD rebounds to 0.5922 after initially dipping to a weekly low of 0.5870, following the RBNZ’s decision to keep rates steady at 5.50%.
- Despite the RBNZ maintaining a neutral stance and commitment to curbing inflation, the Kiwi rallied on US Dollar weakness.
- Mixed US economic data, including a slowdown in private hiring and service sector activity, dampens demand for the Greenback, aiding the NZD/USD recovery.
The New Zealand Dollar (NZD) stages a comeback versus the US Dollar (USD) after the Reserve Bank of New Zealand (RBNZ) decided to hold rates unchanged, while mixed US economic data dented demand for the safe-haven status of the Greenback (USD). At the time of writing, the NZD/USD is exchanging hands at 0.5922 after hitting a weekly low of 0.5870.
New Zealand Dollar recovers against the US Dollar following the RBNZ's decision to hold rates and mixed US economic data
During the Asian session, the RBNZ decided to keep rates unchanged at 5.50%, as expected, though it struck a neutral stance. RBNZ’s officials reiterated its determination to curb inflation to its target, agreeing to keep rates high “for a sustained period of time.” The NZD/USD did not advance on the RBNZ’s decision; instead fell to a daily low of 0.5870, but overall, US Dollar weakness lent a lifeline to the Kiwi as the North American session kicked in.
On the US side, private hiring slowed, as shown by the Employment Change report of ADP, with September hiring sliding to 89K, below estimates of 153K, and trailing August’s 177K. Recently, business activity in the services sector hit 53.6, as reported by the ISM Non-Manufacturing PMI, as foreseen, but slowed compared to last month’s 54.5.
NZD/USD Price Analysis: Technical outlook
The daily chart portrays the Kiwi remains downward pressured despite the ongoing recovery, which would need to witness the pair breaking resistance at the 50-day moving average (DMA) at 0.5970 to challenge the 0.6000 figure. To shift the NZD/USD’s bias to neutral, buyers must lift the pair to a new cycle high above 0.6048. Conversely, the downtrend could resume if bears stepped in and pushed prices below 0.5900.
Author
Christian Borjon Valencia
FXStreet
Christian Borjon began his career as a retail trader in 2010, mainly focused on technical analysis and strategies around it. He started as a swing trader, as he used to work in another industry unrelated to the financial markets.
