NZD/USD analysis and the RBNZ interest rate decision preview

The NZD/USD exchange rate drifted upwards on Monday, continuing the post-non-farm payrolls (NFP) data price action. The pair jumped to 0.6221, the highest point since June 22nd as focus shifts to the upcoming RBNZ decision.

RBNZ rate decision preview

The NZD to US dollar rate rose slightly after the US published soft jobs numbers. According to the Bureau of Labor Statistics (BLS), the economy added over 209k jobs in June, lower than the expected increase of 230k. The bureau also downgraded the number of jobs created in May and April.

Most analysts were caught off-guard for two main reasons. First, the past few jobs reports were better than estimates. Second, a day before, a report by ADP showed that the private sector added over 400k jobs in June. 

Despite the jobs report miss, analysts believe that the Fed will continue hiking interest rates since inflation remains above 2%. The next important USD news will come on Wednesday when the US will publish the latest consumer inflation data.

Another important forex news will be the upcoming Reserve Bank of New Zealand (RBNZ) interest rate decision. Most economists expect that the RBNZ will leave interest rates unchanged at 5.50%. 

The decision comes at a difficult time for the New Zealand economy. Recent data showed that the country’s economy sank into a recession in the first quarter as inflation remained at an elevated level and rates rose. The RBNZ has hiked rates from near zero during the pandemic to 5.50%.

Therefore, more rate hikes could push the country deeper into a recession. Most importantly, New Zealand’s inflation dropped to 6.7% in the first quarter. 

NZD/USD technical analysis

The daily chart shows that the NZD to USD pair has been in a slow downward trend in the past few months. It has moved between the descending channel shown in black. The pair has moved slightly above the 25-day and 50-day moving averages. Further, the MACD has moved above the neutral point.

Therefore, the pair will likely remain in this range ahead of the RBNZ interest rate decision. The key support and resistance levels to watch will be at 0.5970 and 0.6320. A move below the support will see it drop to the next key support at 0.5900. 

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