NZD/USD delivers V-shape recovery, climbs to near 0.6200 as US Dollar corrects

NZD/USD resumes upside journey as US Dollar falls on backfoot.
Fed policymakers need more conviction that inflation will decline to their desired target of 2%.
The RBNZ is expected to keep its OCR unchanged at 5.50%.

Sagar Dua FXStreet

The NZD/USD pair delivers a solid recovery from the round-level resistance of 0.6200 in the late European session on Friday. The Kiwi asset strengthens as the US Dollar has come under pressure despite the Federal Reserve (Fed) preferring to delay rate cuts. Fed policymakers are worried that premature rate cuts could flare up inflation again.

S&P500 futures trade slightly positive ahead of the US opening, indicating upbeat market sentiment. The US Dollar Index (DXY), which measures the value of the Greenback against six rival currencies, extends corrects to 103.77. 10-year US Treasury yields have dropped sharply to 4.30%.

On Thursday, Fed policymakers said they need more confidence that inflation will converge to 2% before considering rate cuts. Fed Governor Christopher Waller said there is no need to hurry for rate cuts. The risks of reducing interest rates too soon are higher than delaying them. Fed policymakers are uncertain about inflation declining to the 2% target after the release of the surprisingly stubborn Consumer Price Index (CPI) data for January.

Meanwhile, the New Zealand Dollar will be guided by market expectations of the monetary policy announcement by the Reserve Bank of New Zealand (RBNZ) scheduled for next week. The RBNZ is expected to keep its Official Cash Rate (OCR) unchanged at 5.50%.

While high price pressures are leaving no room for RBNZ policymakers to reduce key lending rates, domestic economic indicators demand liquidity stimulus. The Q4 Retail Sales data, released this week, contracted sharply by 1.9% against a 0.8% decline in the third quarter of 2023.

NZD/USD

Overview
Today last price	0.6209
Today Daily Change	0.0009
Today Daily Change %	0.15
Today daily open	0.62

Trends
Daily SMA20	0.6119
Daily SMA50	0.6181
Daily SMA100	0.6087
Daily SMA200	0.6077

Levels
Previous Daily High	0.6219
Previous Daily Low	0.6171
Previous Weekly High	0.6153
Previous Weekly Low	0.6049
Previous Monthly High	0.6339
Previous Monthly Low	0.6061
Daily Fibonacci 38.2%	0.6201
Daily Fibonacci 61.8%	0.6189
Daily Pivot Point S1	0.6174
Daily Pivot Point S2	0.6149
Daily Pivot Point S3	0.6126
Daily Pivot Point R1	0.6222
Daily Pivot Point R2	0.6245
Daily Pivot Point R3	0.627

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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