The NZD/USD exchange rate finished nearly unchanged on Wednesday, though the session saw a notable fluctuation of around 50 pips. In the early hours in the Asia-Pacific region, the pair climbed to a high, only to experience significant selling later, reaching a low during New York trading. It has since partially recovered, settling close to its previous closing price while consolidating near the lower end of its intraday range.
According to the Reserve Bank of New Zealand (RBNZ), the inflation expectations survey for the second quarter showed a rise to 2.53%, up from 2.37% in the first quarter—marking the largest increase in a year. This uptick indicates that ongoing tensions, particularly the conflict between the US and Iran, are exerting pressure on long-term domestic price expectations, keeping inflation in the spotlight. Additionally, the New Zealand Business Purchasing Managers Index (PMI) for April has a preliminary reading of 53.2, with further domestic factors on the horizon.
On the U.S. side, the Producer Price Index (PPI) data for April revealed a month-over-month increase of 1.4%, which is significantly higher than the projected 0.5%. Year-over-year, the growth was 6.0%, outpacing expectations of 4.9%. Core PPI, which excludes food and energy, saw a month-over-month rise of 0.3%, aligning with what was anticipated. This strong performance underscored the narrative that energy-related inflation is affecting broader price levels, resulting in a boost for the USD and a decline in previous gains for the risk-sensitive pair. Tensions remain high, particularly with the Strait of Hormuz largely closed and comments from US President Donald Trump labeling Iran’s recent cease-fire response as unacceptable. Brent crude is trading above $105 per barrel. Upcoming data releases on U.S. retail sales and new jobless claims will be crucial to watch.
NZD/USD 15 minute chart
On the 15-minute chart, NZD/USD currently trades at 0.5936, slightly below the opening price of 0.5952. The short-term trend appears to be somewhat bearish as intraday gains haven’t returned above that mark. Recent Stochastic RSI readings have retreated toward middle levels, indicating that, following a previous oversold condition, upward momentum has diminished, keeping the pair in a vulnerable position.
Looking upward, the immediate resistance to overcome is the day’s starting point at 0.5952, which bulls will need to breach to alleviate some selling pressure and set the stage for a potential recovery. On the downside, the absence of nearby structural support means that fresh selling might rapidly test lower intraday levels, and momentum indicators suggest that sellers could regain an upper hand if the price slips below 0.5936 decisively.
From a 4-hour perspective, NZD/USD is also at 0.5936, remaining above the 200-period exponential moving average (EMA) at 0.5896. This suggests a retention of the overall positive near-term outlook, despite recent pullbacks. This decline seems more like consolidation rather than a trend reversal, as the price continues to be supported by the long-term trend indicator.
On the downside, major support lies at the 200-period EMA of 0.5896. A strong break below this level could undermine the bullish sentiment and trigger a larger correction. Momentum indicators, specifically the Stochastic RSI, have entered oversold territory around 15, indicating that bearish pressure might ease, allowing for renewed buying interest as long as it stays above the EMA support.
