NZD: The Week Ahead

Commerzbank’s analysis suggests a brighter outlook for the New Zealand Dollar (NZD) in the coming months despite recent downward pressure. Factors like broader U.S. Dollar strength and domestic issues have kept the NZD below last year’s highs. However, robust labor markets in both New Zealand and Australia and an expected stabilization of Chinese economic growth offer reasons for optimism. While economic growth in New Zealand is projected to stabilize slowly, persistent inflation prompts cautious actions from the Reserve Bank of New Zealand (RBNZ). Despite challenges, Commerzbank anticipates a moderate appreciation of the NZD due to the relatively hawkish stance of its central bank compared to other G10 counterparts.

GBPNZD – H4 Timeframe

The 4-hour timeframe chart of GBPNZD as attached above shows price currently retesting the 88% region of the Fibonacci retracement tool. This, combined with the trendline support, and 200-period moving average, indicates the likelihood of price to bounce off the current region to approach the 23% of the Fibonacci retracement as a target level.

Analyst’s Expectations:

  • Direction: Bullish
  • Target: 2.07402
  • Invalidation: 2.04964

NZDUSD – H4 Timeframe

NZDUSD is currently trading between 76% and 88% of the Fibonacci retracement after having broken structure and trendline support. This means that the current price action is likely to reverse once price retests the trendline. Other confirmations include the confluence of two resistance trendlines, the 200-period moving average resistance, the Fibonacci retracement levels, and also, the supply zone.

Analyst’s Expectations:

  • Direction: Bearish
  • Target: 0.60761
  • Invalidation: 0.61595

NZDCHF – D1 Timeframe

The price action on the daily timeframe of NZDCHF is very akin to what we saw earlier on the 4-hour timeframe of NZDUSD. Here, we see a similar break of structure and trendline support, with price currently making a move to retest these resistance trendlines, as well as the supply zone and the Fibonacci retracement levels. I expect to see a rejection from the supply zone.

Analyst’s Expectations:

  • Direction: Bearish
  • Target: 0.52863
  • Invalidation: 0.54377


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