The New Zealand dollar was the worst performing currency this week as the high-yielding currency fell more than 2% against the greenback, and as the Organization for Economic Cooperation and Development sees room for lower interest rates in the $128B economy, the NZD/USD is likely to fall further over the near-term as investors raise bets for a RBNZ rate cut in the month ahead.
[B]Currency Pair: [/B]NZD/USD
[B]Chart:[/B] 60 Min Charts
[B]Short-Term Bias:[/B] Flat
[B][U]Analysis[/U][/B]
The New Zealand dollar was the worst performing currency this week as the high-yielding currency fell more than 2% against the greenback, and as the Organization for Economic Cooperation and Development sees room for lower interest rates in the $128B economy, the NZD/USD is likely to fall further over the near-term as investors raise bets for a RBNZ rate cut in the month ahead. After reaching a high of 0.6349 in October, the kiwi-dollar slipped to a low of 0.4894 last month due to a rise in risk aversion, and the lack of momentum to break above 0.6030-40 (78.6% Fib) paired with expectations for lower rate cut are likely to lead the pair towards the lower-end of its broad range over the remainder of the month. Over the next few hours of trading, the NZD/USD may continue to push lower to make a run for 0.5620-30 (50.0% Fib) to test for short-term support as equity futures foreshadow a lower open for the U.S. market however, the bullish divergence in the RSI suggests that the pair may push higher to retrace the drop from earlier this week. Nevertheless, the drop in market sentiment could lead the kiwi-dollar to fall below the 50.0% Fib over the following week, and a break below this level could lead the kiwi-dollar to retrace the advance in March. Be sure to check out other Technical Reports from DailyFX for additional information on the major currency pairs.
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