Markets head into the second half of the week with a focus on key economic data and central bank decisions that could influence currency dynamics and investor sentiment. Attention turns to the Bank of England’s rate decision, US jobless claims, and Canada’s employment report—all potential catalysts for volatility. Meanwhile, NZDUSD continues to attract interest as technical and fundamental signals align, with bullish momentum intact but vulnerable to near-term shifts depending on global macro developments.
High Impact Economic Events
Thursday 14:00 (GMT+3) – UK: Official Bank Rate (GBP)
The NZDUSD has been following an upward trajectory following the April 9 rebound from 0.54838, supported by the formation of an Inverted Hammer candlestick pattern—a bullish reversal signal. This technical development has set the stage for the currency pair to reach a high of 0.60279.
From a technical perspective, multiple indicators reinforce the prevailing uptrend. The Momentum Oscillator remains firmly above the 100 baseline, indicating sustained buying pressure. Additionally, the Relative Strength Index (RSI) continues to hold above the neutral 50 threshold, while price action remains elevated above both the 20- and 50-period exponential moving averages (EMAs). Collectively, these factors suggest a strong underlying trend and bolster bullish market sentiment.
While the broader outlook remains constructive, a near-term consolidation or corrective pullback cannot be ruled out, particularly if price breaches the 0.58924 level, which would signal weakening bullish momentum and open the door to further downside exploration.
Key Resistance Levels
If buyers maintain control of the market, traders may shift their focus to the following four potential resistance levels:
0.60279: The initial resistance level is estimated at 0.60279, mirroring the high reached on April 22.
0.61116: The second price target is seen at 0.61116, reflecting the 161.8% Fibonacci Extension drawn from 0.60279 to 0.58924.
0.62471: The third price target is established at 0.62471, corresponding to the 261.8% Fibonacci Extension drawn from 0.60279 to 0.58924.
0.63586: An additional price objective is estimated at 0.63586, representing the weekly resistance, R2, calculated using the standard Pivot Points methodology.
Key Support Levels
If sellers take control of the market, traders may focus on the following four key support levels:
0.58924: The initial support level is seen at 0.58924, representing the trough marked May 1.
0.58145: The second support level is positioned at 0.58145, aligning with the weekly Pivot Point, PP, calculated using the standard methodology.
0.56916: The third downside target is noted at 0.56916, corresponding to the 61.8% Fibonacci Retracement drawn from 0.54838 to 0.60279.
0.54838: An additional downside target is determined at 0.54838, reflecting the low point from April 9.
Fundamentals
New Zealand’s labor market showed only modest growth in Q1, with the unemployment rate holding steady at 5.1% and wage inflation easing, fueling expectations for further interest rate cuts by the Reserve Bank of New Zealand. Employment rose slightly, while participation dipped, and youth involvement in the labor force continued to decline. With inflation within target and domestic demand remaining weak, analysts expect the central bank to lower the cash rate further this year to support the economy.
On the other hand, the Federal Reserve kept interest rates unchanged at 4.25%–4.50%, citing solid economic growth and a stable labor market, though inflation remains somewhat elevated. The FOMC acknowledged rising uncertainty around the outlook, noting increased risks to both employment and inflation. Policymakers reiterated their data-dependent approach and commitment to the 2% inflation target, signaling openness to future adjustments based on evolving economic conditions.
Conclusion
As global data and rate decisions continue to unfold, NZDUSD remains technically supported but increasingly sensitive to macroeconomic shifts. With markets eyeing key updates from the UK, US, and Canada, traders should stay alert to potential catalysts that could reinforce—or disrupt—the pair’s current bullish structure. Caution is warranted as consolidation risks build, especially near key support thresholds
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