NZD/USD Stabilises Ahead of the Holidays

Forex trading is slowing down as the holidays approach, offering a pause after significant movements driven by various news events, including central bank decisions.

Notably, NZD/USD reached its lowest level since October 2022 at the end of last week.

The decline in NZD/USD has been influenced by two main factors:

1. The dollar gained momentum following the Federal Reserve's decision to lower the interest rate by 0.25% and its forward guidance for 2025.

2. According to Reuters:
→ New Zealand's economy contracted much more sharply than expected in the second and third quarters.
→ Market participants anticipate that the Reserve Bank of New Zealand may lower interest rates by 0.5% in February.

Technical analysis of the NZD/USD 4-hour chart depicts a bearish outlook:

• The 0.58 level, which served as support in November, turned into resistance in December.
• The price is currently hovering near the lower boundary of a descending channel that has been in place since October.
• The RSI indicator signals that the market is approaching oversold conditions.

While bears may attempt to extend the downtrend by pushing the price below last week’s low, this could create a divergence pattern on the RSI indicator, offering hope for a potential bullish reversal.

Trade over 50 forex markets 24 hours a day with FXOpen. Take advantage of low commissions, deep liquidity, and spreads from 0.0 pips (additional fees may apply). Open your FXOpen account now or learn more about trading forex with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.