NZDUSD declines 1.51% to 0.62596 amid U.S. housing market cooling and economic uncertainties

NZDUSD Analysis

Performance after Wednesday
Period	Pct	Chg	Momentum
Wednesday	-1.51%	-95.7 Pips
Week to-date	0.38%	23.4 Pips
September	-0.06%	-3.7 Pips

Upcoming key events (London Time)

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

What happened lately

In the United States, new-home sales experienced a notable decline of 4.7% in August, a significant turnaround from the 10.6% increase observed in July. This data suggests a cooling in the housing market, indicating potential challenges in the real estate sector. Meanwhile, the U.S. House Price Index for July showed a slight improvement, rising to 0.1% from a previous decline of -0.1% in June, based on data provided by FHFA. This marginal increase reflects a stabilizing trend in home prices, albeit the growth remains minimal.

The mixed data from the U.S. housing market, along with broader economic anxieties, likely contributed to the recent drop in the NZDUSD exchange rate by 1.51%, bringing it to 0.62596 as of Wednesday. Upcoming high-impact economic events such as the U.S. GDP annual rate on Thursday and the speech by Federal Reserve Chair Jerome Powell are anticipated to add further volatility. Additionally, the release of the PCE Price Index, excluding food and energy, on Friday is poised to be another critical data point. These events can heavily influence market sentiment and expectations regarding future economic policies.

Considering these factors, the recent news from the U.S. concerning a dip in new-home sales and a slight rise in the House Price Index, along with significant upcoming economic data and events, may generate further pressure on the NZDUSD pair. If the forthcoming reports paint a robust picture of the U.S. economy, the U.S. dollar could strengthen, leading to a potential depreciation of the New Zealand dollar against it. Conversely, if the data disappoints, it could provide respite to the NZDUSD, aiding in its recovery.

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What can we expect from NZDUSD today?

NZDUSD on Wednesday dropped -1.51% to 0.62596. Price is above 9-Day EMA while Stochastic is falling.

Updated daily direction for NZDUSD looks bearish as the pair posted lower in Wednesday trading session.

Looking ahead for the day, immediate support level is at S1 0.62259 with break below could see further selling pressure towards S2 at 0.61921. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 0.63554 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 0.62569 would indicate selling pressure.

For the week to-date, take note that NZDUSD is mixed as compared to the prior week.

Key levels to watch out:

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