Bullish view
Buy the NZD/USD pair and set a take-profit at 0.6000.
Add a stop-loss at 0.5850.
Timeline: 1-2 days.
Bearish view
Sell the NZD/USD pair and set a take-profit at 0.5850.
Add a stop-loss at 0.6000.
The NZD/USD exchange rate rebounded after the US dollar pared back some of the recent gains. It was trading at 0.5945 on Thursday, up substantially from this week's low of 0.5835.
New Zealand Dollar Rises Amid Dip Buying
The NZD/USD exchange rate rebounded nearly 2% from its lowest level this week as investors bought the dip after the recent sell-off.
This rebound happened as the US dollar retreated amid early signs that talks between the US and Iran would start soon. These hopes rose after the New York Times reported that Iran had reached out to the United States.
That report helped pushed American stocks and cryptocurrencies higher as investors embraced a risk-on sentiment.
The NZD/USD pair rose even as a report showed that the US services sector continued recovering, a notable thing since the sector is the most important one for the US economy. It expanded at the highest level since 2022, while a gauge of inflation dropped to a yearly low.
The NZD/USD pair rose after the recent export and import trade data from New Zealand. According to the statistics agency, export prices rose by 5.3% in the fourth quarter after falling by 1.6% in the third quarter. Import prices rose by 1.5% after rising by 0.5% in the previous quarter. As a result, the terms of trade rose by 3.7%.
The next important catalysts for the NZD/USD pair will be the US export and import prices, jobless claims data, and the job cuts report.
These numbers will be followed by the upcoming Bureau of Labor Statistics (BLS) jobs report, which will provide more information about the American economy. Economists expect the upcoming report to show that the economy added 70k jobs in February after adding 110k in the previous month.
NZD/USD Technical Analysis
The NZD/USD pair has been in a downward trend after peaking at 0.6092 in January to a low of 0.5835. Its biggest daily drop happened on Tuesday when it plunged to a low of 0.5835.
It formed a big hammer candlestick pattern, a common bullish reversal sign in technical analysis. It has also formed a harami candle, which often leads to a rebound.
The pair has moved slightly above the 50-day Exponential Moving Average (EMA), while the Relative Strength Index (RSI) pointed upwards.
Therefore, the pair will likely continue rising in the near term. Such a move will point to more gains, potentially to the psychological level at 0.6000.