NZD\/USD held near multi-month highs on Wednesday, staying on the bullish side into the latter part of the week. The US Non-Farm Payrolls report showed 130K jobs added in January versus a 70K forecast, while an 898K downward benchmark revision to 2025 payroll data weighed on the US Dollar.<\/p>\n
The Federal Reserve kept rates at 3.50% to 3.75% at its January meeting, and markets are pricing two cuts this year. In New Zealand, the Reserve Bank of New Zealand is expected to hold the Official Cash Rate at 2.25% on 18 February after six cuts through 2025 that took rates from 5.50% to 2.25%.<\/p>\n
Inflation is near the top of the 1% to 3% target band, and upcoming data includes the Business NZ PMI for January on Thursday and RBNZ Inflation Expectations for Q1 on Friday. Friday also brings the US CPI for January, with consensus at 2.5% year-on-year for headline CPI and 0.3% month-on-month for the core reading.<\/p>\n
On the daily chart, NZD\/USD traded at 0.6051, up 0.10%, just below 0.6094 resistance. It is above the 50-day EMA at 0.5881 and the 200-day EMA at 0.5833, with consolidation between 0.5960 and 0.6094 and a November low near 0.5580.<\/p>\n
We see the NZD\/USD holding firm around the 0.6050 level, consolidating after a strong run-up. The primary driver remains the weak US labor market outlook, cemented by the huge 898,000 downward revision to 2025’s job numbers. Recent data, with weekly initial jobless claims hovering around 220,000, continues to support the narrative of a cooling US economy.<\/p>\n
The key trading theme for the coming weeks is the divergence between the Federal Reserve and the Reserve Bank of New Zealand (RBNZ). While the Fed is widely expected to cut rates at least twice more this year, the RBNZ faces a different picture at home. With New Zealand’s Q4 2025 inflation data showing a stubborn 4.7% year-over-year increase, the RBNZ is likely to hold its cash rate steady at 2.25% at its meeting on February 18.<\/p>\n
Supporting the Kiwi are fundamental factors like the recent strength in dairy prices, a key export for New Zealand. The Global Dairy Trade Price Index has posted gains in four of its last five auctions, which directly improves the country’s trade balance. This contrasts with the broader pressure on the US Dollar as markets price in further monetary easing from the Fed.<\/p>\n
For derivative traders, this points towards positioning for a potential upside break in NZD\/USD. Buying call options with strike prices above the key 0.6094 resistance level could be a prudent way to capture a move towards the 0.6150 and 0.6200 targets. However, we must watch this Friday’s US Consumer Price Index data, as a higher-than-expected inflation reading could create short-term volatility and US dollar strength.<\/p>\n
Risk management is crucial, as the pair has been consolidating for a week. A sustained break below the 0.5960 support level would signal that the bullish momentum has faded, potentially triggering a pullback towards the 0.5880 area. Traders could use this level as a guide for placing stop-loss orders or for purchasing put options as a hedge against a downside reversal.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" NZD\/USD hovered near multi-month highs as Fed holds rates; RBNZ steady, with US CPI and NZ data ahead.<\/p>\n","protected":false},"author":62,"featured_media":16995,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-41650","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/41650","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=41650"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/41650\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16995"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=41650"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=41650"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=41650"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}