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27 March 2024 | FXGT.com

US Economic Data Sets the Stage for NZD/USD Volatility

  • NZD/USD Faces Downward Pressure: Following resistance at $0.62 in early March, NZD/USD has declined by 3.5%, indicating a renewed downtrend as the New Zealand economy faces a technical recession from contractions in the last two quarters of 2023.
  • Break Below Key Support: The pair’s decline beyond the $0.6040 support level, last breached in November 2023, has aligned the trend structure downwards across multiple timeframes.
  • Market Consolidation: NZD/USD is making efforts to find stability around the key psychological mark of $0.6000 after marking a new four-month low. Despite the recent lows, the pair has not entered oversold territory, suggesting the potential for further declines.
  • Resistance Pivot at $0.6030: Immediate resistance is outlined at this week’s high of $0.6030, where a new rejection of this level may signal to a continuation of the bearish trend.
  • Potential for Upward Correction: If NZD/USD exceeds the $0.6030 resistance, it could trigger an upward correction initially targeting $0.6050.  A continuation beyond this point could lead towards the significant $0.6100 resistance level, which is currently defending the downtrend structure on the 4 Hour timeframe.
  • Impact of Falling Below $0.60: Should the pair drop below the psychological $0.60 threshold, it may trigger an accelerated decline towards $0.5940, identified as a breakout swing target on the 4-hour chart.
  • Upcoming US Economic Data: Upcoming US economic data releases, including GDP growth and unemployment claims on Thursday, followed by inflation figures on Friday, are highly anticipated. These data releases could significantly impact the Federal Reserve’s monetary policy outlook and in extension the NZD/USD trend.
  • Potential Volatility: The upcoming US economic data releases are expected to trigger market volatility, potentially serving as a catalyst for market movements. Monitoring the significant levels in combination with the schedule of these announcements is essential to effectively react to potential market changes.

NZDUSD 4 Hour Chart

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