The NZD/USD pair has declined for the fifth consecutive session, dropping by approximately 1% from its peak of 0.5773 on February 21, 2025, to a low of 0.5688 recorded on February 26.
Recent New Zealand economic data indicate signs of economic weakness:
• The unemployment rate rose to 5.10%, exceeding expectations (4.80%).
• Electronic card retail sales declined on a monthly basis, contracting by 1.6%, lower than the previous reading (2.4%).
• The building permits index decreased on a monthly basis, contracting by 5.6%, a worse figure than the previous reading (4.9%).
• The producer price index contracted by 0.9%, lower than the previous reading (1.9%).
In its latest meeting on February 19, 2025, the Reserve Bank of New Zealand (RBNZ) cut interest rates by 50 basis points, from 4.25% to 3.75%, aligning with market expectations. This marks the fourth consecutive rate cut, following previous reductions of 25, 50, and 50 basis points. Expectations indicate further rate cuts in the coming period.
Markets are now awaiting the release of the U.S. GDP report for Q4 of last year. Forecasts suggest a growth rate of 2.3%, lower than the previous reading (3.1%). Given this, caution is advised, as any GDP reading above expectations could have a negative impact on NZD/USD.
From a technical perspective, if the pivot level at 0.5707 is broken, the NZD/USD pair may target support levels at 0.5680, 0.5661, and 0.5634. Conversely, if it surpasses the pivot level, resistance levels at 0.5726, 0.5753, and 0.5772 may come into play. Meanwhile, the Relative Strength Index (RSI) is currently around 48 points, indicating negative momentum for NZD/USD.
Please note that this analysis is provided for informational purposes only and should not be considered as investment advice. All trading involves risk.
