NZDUSD Outlook: Momentum Shifts and Key Price Targets

As markets navigate a week filled with high-impact economic data, traders will be closely watching central bank decisions, inflation trends, and employment reports for directional clarity. The NZDUSD pair’s technical outlook suggests a shift in momentum, with key resistance and support levels guiding price action. Meanwhile, fundamental factors, including New Zealand’s evolving monetary policy stance and broader global uncertainties, add another layer of complexity. With volatility expected to persist, adaptability remains essential for market participants seeking opportunities amid shifting conditions.

Wednesday 03:00 am (GMT+2) – New Zealand: Official Cash Rate (NZD)
Wednesday 09:00 am (GMT+2) – UK: CPI y/y (GBP)
Thursday 02:30 am (GMT+2) – Australia: Employment Change (AUD)
Thursday 15:30 (GMT+2) – USA: Unemployment Claims (USD)
Friday 09:00 am (GMT+2) – UK: Retail Sales m/m (GBP)
Friday 10:15 am (GMT+2) – France: Flash Manufacturing PMI (EUR)
Friday 10:15 am (GMT+2) – France: Flash Services PMI (EUR)
Friday 10:30 am (GMT+2) – Germany: Flash Manufacturing PMI (EUR)
Friday 10:30 am (GMT+2) – Germany: Flash Services PMI (EUR)
Friday 11:30 am (GMT+2) – UK: Flash Manufacturing PMI (GBP)
Friday 11:30 am (GMT+2) – UK: Flash Services PMI (GBP)
Friday 15:30 (GMT+2) – Canada: Retail Sales m/m (CAD)
Friday 16:45 (GMT+2) – USA: Flash Manufacturing PMI (USD)
Friday 16:45 (GMT+2) – USA: Flash Services PMI (USD)

The NZDUSD pair established support at 0.55145 on February 3, following four consecutive months of lower highs and lower lows. The subsequent rebound was initiated by a Hammer candlestick pattern, signaling diminishing selling pressure. This shift was further reinforced by a failure swing reversal, where the trough at 0.55994 held above its prior level, and price action breached the 0.57012 peak—confirming a bullish trend.

Momentum indicators align with this recovery. The Momentum Oscillator remains above 100, suggesting continued upside pressure, while the Relative Strength Index (RSI) is maintaining its position above 50, indicating sustained buying interest.

Should the bulls maintain market control, traders may direct their attention toward the four potential resistance levels below:

0.57489: The initial resistance level is set at 0.57489, which mirrors the daily high marked February 17.
0.58230: The second price target is identified at 0.58230, representing the weekly resistance, R2, calculated using the standard Pivot Points methodology.
0.58659: The third price objective is determined at 0.58659, which corresponds with the 261.8% Fibonacci Extension drawn from 0.57012 to 0.55994.
0.59277: An additional price target is established at 0.59277, representing the peak from November 29.

Should the bears take market control, traders may consider the four potential support levels listed below:

0.56858: The initial support level is seen at 0.56858, corresponding to the weekly Pivot Point, PP, estimated using the standard methodology.
0.55994: The second support level is estimated at 0.55994, representing the low point from February 12.
0.55486: The third support level is identified at 0.55486, reflecting the weekly support, S2, calculated using the standard Pivot Points methodology.
0.55145: An additional downside target is 0.55145, mirroring the daily low from February 3.

New Zealand’s central bank is slowing the pace of interest rate cuts after a third consecutive 50-basis-point reduction, bringing the Official Cash Rate to 3.75%. The Reserve Bank of New Zealand (RBNZ) signaled smaller 25-point cuts in the coming months, aiming for a rate of 3% by year-end. While inflation is expected to rise to 2.7% mid-year, the RBNZ remains confident it will stay within target. Economic recovery is anticipated in 2025, but uncertainty over global trade and geopolitical risks may impact growth. The New Zealand dollar and bond yields initially dipped but rebounded following the announcement.

With a packed economic calendar and shifting market dynamics, traders face a week of potential volatility driven by key data releases and central bank decisions. The NZDUSD pair’s technical and fundamental outlook suggests evolving trends, while broader macroeconomic uncertainties continue to influence sentiment. As markets react to incoming data, flexibility and strategic positioning will be critical for navigating the opportunities and risks ahead.