{"id":17859,"date":"2025-05-21T07:42:04","date_gmt":"2025-05-21T07:42:04","guid":{"rendered":"https:\/\/www.vtmarkets.com\/?p=17859"},"modified":"2025-05-21T07:42:04","modified_gmt":"2025-05-21T07:42:04","slug":"forex-market-analysis-21-may-2025","status":"publish","type":"post","link":"https:\/\/www.vtmarkets.com\/en-eu\/analysis\/forex-market-analysis-21-may-2025\/","title":{"rendered":"Forex market analysis: 21 May 2025"},"content":{"rendered":"\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" src=\"https:\/\/www.vtmarkets.com\/en-eu\/wp-content\/uploads\/sites\/33\/2025\/05\/New-Zealand-1024x536.png\" alt=\"\" class=\"wp-image-17861\" \/><\/figure>\n\n\n\n<p><\/p>\n\n\n\n<p>The New Zealand dollar is gaining strength as traders react to positive economic news at home and growing uncertainty abroad. A strong trade performance has boosted confidence in the local economy, while a softer US dollar is giving the Kiwi room to climb. As market expectations shift, attention now turns to upcoming policy signals and fiscal announcements that could influence the next move in NZD\/USD.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\"><strong>NZD\/USD climbs amid strong trade data and weaker US dollar<\/strong><\/h2>\n\n\n\n<p>The <strong>New Zealand dollar<\/strong> advanced towards <strong>USD 0.594<\/strong> on Wednesday, lifted by a retreat in the <strong>US dollar<\/strong> and renewed optimism following robust <strong>April trade figures<\/strong>.<\/p>\n\n\n\n<p>The Kiwi rallied as much as <strong>0.5% intraday<\/strong>, briefly testing resistance near <strong>0.5948<\/strong>, supported by both <strong>technical strength<\/strong> and <strong>solid fundamentals<\/strong>.<\/p>\n\n\n\n<p>April\u2019s trade data significantly beat expectations, with <strong>New Zealand recording a surplus of NZD 1.43 billion<\/strong>\u2014its strongest April performance in several years. This marked a sharp turnaround from a marginal deficit of NZD 0.01 billion in the same period last year.<\/p>\n\n\n\n<p>Exports soared by <strong>25% year-on-year<\/strong>, led by agricultural and forestry products, while imports rose by just <strong>1.8%<\/strong>.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">New Zealand Finance Minister Nicola Willis will keep a tight rein on spending in this week\u2019s budget as uncertainty about global growth holds back a domestic recovery and restrains government revenue <a href=\"https:\/\/t.co\/CDJJB33bwo\">https:\/\/t.co\/CDJJB33bwo<\/a><\/p>&mdash; Bloomberg (@business) <a href=\"https:\/\/twitter.com\/business\/status\/1924876304047858163?ref_src=twsrc%5Etfw\">May 20, 2025<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p><\/p>\n\n\n\n<p>This stronger-than-expected trade balance has led traders to reassess their <strong>Reserve Bank of New Zealand (RBNZ)<\/strong> outlook. While a <strong>25 basis point rate cut<\/strong> remains the base case for next week, expectations for deeper easing have eased.<\/p>\n\n\n\n<p>The <strong>year-end terminal rate<\/strong> is now forecast at <strong>2.83%<\/strong>, notably higher than previous estimates closer to <strong>2.5%<\/strong>.<\/p>\n\n\n\n<p>The Kiwi\u2019s strength is also being underpinned by a <strong>broad-based US dollar decline<\/strong>, triggered by softening US economic data and growing concerns over fiscal sustainability after <strong>Moody\u2019s downgrade<\/strong>.<\/p>\n\n\n\n<p>Traders are increasingly doubtful that the <strong>Federal Reserve<\/strong> can maintain elevated rates in the face of rising domestic pressures.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\"><strong>Technical analysis: NZD\/USD eyes key 0.5950 resistance<\/strong><\/h2>\n\n\n\n<p>In short-term trading, <strong>NZD\/USD<\/strong> broke out of its intraday consolidation, touching a new local high of <strong>0.59493<\/strong>, just below the psychologically significant <strong>0.5950<\/strong> level.<\/p>\n\n\n\n<p>The pair has been carving out a pattern of <strong>higher lows<\/strong> since rebounding from <strong>0.58942<\/strong>, signalling <strong>bullish momentum<\/strong>.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" src=\"https:\/\/www.vtmarkets.com\/en-eu\/wp-content\/uploads\/sites\/33\/2026\/03\/image-22-1024x440-1.jpg\" alt=\"\" class=\"wp-image-17860\" \/><figcaption class=\"wp-element-caption\">NZD\/USD climbs to 0.5949, eyes 0.5950 breakout as bullish momentum accelerates above 0.5900 support, as seen on the <a href=\"https:\/\/apps.apple.com\/au\/app\/vt-markets-online-trading\/id1372647263?mt=8\" target=\"_blank\" rel=\"noopener\" title=\"VT Markets app\">VT Markets app<\/a>.<\/figcaption><\/figure>\n\n\n\n<p><\/p>\n\n\n\n<p>Price action remains above all three <strong>short-term moving averages<\/strong> (5, 10, and 30), with the <strong>5-period MA<\/strong> pointing sharply upwards\u2014a strong indicator of upward pressure.<\/p>\n\n\n\n<p>The <strong>MACD histogram<\/strong> continues to expand in positive territory, while the signal line lags behind, suggesting further upside may be on the cards.<\/p>\n\n\n\n<p>Should NZD\/USD break and close above the <strong>0.5950 threshold with volume<\/strong>, the next resistance zone lies around <strong>0.5970\u20130.5980<\/strong>.<\/p>\n\n\n\n<p>Immediate support is seen at <strong>0.5925<\/strong>, with a more substantial floor near <strong>0.5900<\/strong> in case of a reversal.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\"><strong>NZD\/USD forecast: Eyes on Thursday\u2019s budget<\/strong><\/h2>\n\n\n\n<p>Despite the recent bullish trend, the outlook remains cautious ahead of <strong>Thursday\u2019s government budget announcement<\/strong>, which is expected to signal a <strong>more restrained fiscal policy<\/strong>.<\/p>\n\n\n\n<p>Any aggressive tightening could curb domestic demand and reinforce a <strong>dovish stance from the RBNZ<\/strong>.<\/p>\n\n\n\n<p>Until further clarity emerges, <strong>upside potential<\/strong> for the <strong>NZD\/USD pair<\/strong> looks promising but remains susceptible to shifts in <strong>global risk sentiment<\/strong> or unexpected signals from the central bank.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<p>Click <a href=\"https:\/\/www.vtmarkets.net\/trade-now\/?utm_campaign=account_c&amp;utm_source=dma&amp;utm_medium=website\" target=\"_blank\" rel=\"noopener\" title=\"here\">here<\/a> to open account and start trading.<\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The New Zealand dollar is gaining strength as traders react to positive economic news at home and growing uncertainty abroad. A strong trade performance has boosted confidence in the local economy, while a softer US dollar is giving the Kiwi room to climb. As market expectations shift, attention now turns to upcoming policy signals and <a href=\"https:\/\/www.vtmarkets.com\/en-eu\/analysis\/forex-market-analysis-21-may-2025\/\" class=\"read-more\">Continue Reading<\/a><\/p>\n","protected":false},"author":5,"featured_media":22918,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[37],"tags":[],"class_list":["post-17859","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-analysis"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-eu\/wp-json\/wp\/v2\/posts\/17859","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-eu\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-eu\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-eu\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-eu\/wp-json\/wp\/v2\/comments?post=17859"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-eu\/wp-json\/wp\/v2\/posts\/17859\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-eu\/wp-json\/wp\/v2\/media\/22918"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-eu\/wp-json\/wp\/v2\/media?parent=17859"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-eu\/wp-json\/wp\/v2\/categories?post=17859"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-eu\/wp-json\/wp\/v2\/tags?post=17859"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}