NZD/USD experienced some fluctuations on Tuesday, starting with a peak during the Asian and European trading hours before dipping to around 0.5935 midway through the session. It made a slight recovery as the New York trading close approached. The smaller size of the candlestick, with wicks on either side, indicated some uncertainty following the day’s ups and downs.
Attention on the New Zealand front now shifts to the Reserve Bank of New Zealand’s (RBNZ) inflation expectations survey set for Wednesday, especially after the previous quarter showed readings of 2.37% over two years and 2.59% for one year. New Zealand’s first-quarter consumer price index (CPI) was reported at 3.1% year-on-year, which exceeds the RBNZ’s target range of 1-3%. Policymakers seem cautious about potential shifts in expectations. Nicola Willis, New Zealand’s finance minister, had previously highlighted in late March that inflation might be “much higher” if the ongoing tensions in the Middle East persisted. The situation is getting more concerning, particularly with the Strait of Hormuz facing effective closures. Later this week, Thursday’s BusinessNZ Manufacturing Performance Index for April will provide a summary of the national data.
On the US side, the headline CPI accelerated to 3.8% year-on-year in April, marking the highest level since May 2023 and surpassing the consensus estimate of 3.7%. The core CPI also outpaced expectations at 2.8% year-on-year. Energy costs surged by 17.9% year-on-year, the steepest increase since 2022, attributed to ongoing impacts from the Iran-led oil crisis. President Trump dismissed Iran’s recent ceasefire offer as “garbage” and conveyed that the ceasefire is “on life support,” while ships remain stranded in the strait. Investors are now looking ahead to a discussion between President Trump and Chinese President Xi Jinping in Beijing on Thursday, which could significantly influence the energy and risk environments affecting NZD/USD.
From a technical perspective, on the 5-minute chart, NZD/USD is at 0.5950, lower than the day’s opening of 0.5967. The bias for the intraday movement is moderate and is drifting down from previous highs. The Stochastic RSI has entered oversold territory, around 17, indicating that bearish momentum is building. However, the price action is still limited below the opening price pivot.
The day’s opening at 0.5967 acts as a notable resistance level, which bulls will need to overcome to relieve the downward pressure. If this level remains intact, the short-term trend may continue to experience declines, although oversold conditions could lead to a slight rebound within an overall bearish market.
On the daily chart, NZD/USD is trading at 0.5951, showing some recovery above the 50-day and 200-day exponential moving averages (EMAs). This suggests some short-term positive bias. The current trading positions above the 50-day EMA at 0.5881 and the 200-day EMA at 0.5866 might provide support. Meanwhile, the Stochastic RSI lingering in overbought territory, around 76, hints at a trend of consolidation, despite strong upward momentum.
Initial support is seen near the 50-day EMA, with the 200-day EMA offering a secondary layer of protection if sellers gain strength. Since there are no technical resistance levels close to current indicators, future gains may hinge on whether buyers can keep prices above these moving average supports, especially as the Stochastic RSI readings rise.
