NZDUSD on Friday rose 0.02% to 0.62370. Week ending 2024-09-20 rose 1.18%. What’s going on.

NZDUSD Analysis

Performance
Period	Pct	Chg	Momentum
Friday	0.02%	1 Pips
Week 2024-09-20	1.18%	72.9 Pips	September	-0.42%	-26.3 Pips

Upcoming key events for the new week (London Time)

Thu 01:30 PM Initial Unemployment Insurance Claims
Thu 01:30 PM GDP annual rate
Thu 02:20 PM Federal Reserve Chair Jerome Powell speech
Fri 01:30 PM PCE Price Index, excluding food and energy (12-mth)

What happened over the week

The U.S. saw a slight rebound in its manufacturing sector, as indicated by the Manufacturing Business Outlook Survey, which rose to 1.7 points in September from -7 points in August, according to the Philadelphia Fed. The labor market showed resilience with Initial Unemployment Insurance Claims dropping to 219K for the week ending 14 September from 231K initially reported. U.S. housing market indicators were positive as well, with Building Permits increasing to 1.475 million in August from a revised 1.406 million in July, and Housing Starts rising to 1.356 million from 1.237 million in the same period, reported by the Census Bureau. However, U.S. monetary policy indicated a dovish shift with interest rate projections down to 4.4% from 5.1% and the Federal Funds Rate dropping to 5% from 5.5%, as per the Federal Reserve.

In contrast, New Zealand’s economic data reflected a downtrend. The country’s GDP contracted significantly, with a 12-month GDP rate falling to -0.5% in Q2 from a revised positive 0.5% in Q1, as noted by Stats NZ. The quarterly GDP figures also showed a decline to -0.2% in Q2 from a revised 0.1% in Q1. This reveals a sluggish economic performance, likely placed strain on the New Zealand dollar.

The juxtaposition of strengthening economic indicators in the U.S. versus weakening data in New Zealand has complicated the outlook for the NZDUSD currency pair. The improvement in U.S. employment and housing data, combined with more accommodative monetary policy, helps sustain the U.S. dollar’s strength. Nevertheless, upcoming data like the U.S. GDP annual rate, Initial Unemployment Insurance Claims, and the Federal Reserve Chair Jerome Powell’s speech could provide more volatility and guide future expectations. Meanwhile, the significant contraction in New Zealand’s GDP creates a bearish sentiment for the Kiwi, pressuring the NZDUSD lower despite a recent minor rise to 0.62370. These events collectively suggest that the NZDUSD may continue to experience volatility with a potential downward bias in the near term due to divergent economic conditions.

From X (Twitter)

Latest release: GDP decreases 0.2 percent in the June 2024 quarter.https://t.co/NtLNDUou3s pic.twitter.com/newp7CGa5a

— Stats NZ (@Stats_NZ) September 18, 2024

What can we expect from NZDUSD for the new week and what happened on Friday?

NZDUSD on Friday rose 0.02% to 0.62. Price is above 9-Day EMA while Stochastic is falling. For the week ending 2024-09-20, the pair rose 1.18% or 72.9 pips higher.

Looking ahead, NZDUSD looks mixed as the pair is likely to consolidate above week low of 0.62.

For the new week, our technical outlook looks bullish, immediate upside resistance level at 0.63 (WR1) with break above could target 0.63 (WR2). On the downside, we are looking at week low of 0.62 as an important support. Break below this level could weaken the current bullish momentum. A break above 0.63 would suggest bullish bias after recent positive movement.

For the month of September, NZDUSD is down by -0.42% or -26.3 pips lower.

Weekly key levels to watch out:

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