New Zealand’s GDP, previously impacted by significant interest rate hikes resulting in a low of -0.3%, is showing signs of improvement. The consensus for tonight’s GDP release is around -0.1%, indicating a positive turnaround. This improvement is expected to continue as the Reserve Bank of New Zealand recently reduced interest rates due to achieving a low inflation rate of 3%. This monetary easing is anticipated to boost the NZD/USD currency rate, reflecting increased investor confidence and economic activity.

NZD/USD: Technical Analysis – 19th June 2024

Considering the recent improvement in New Zealand’s GDP forecast and the anticipated reduction in interest rates due to low inflation, the NZD/USD pair has been responding positively. This positive shift is evident in the currency pair’s upward movement, indicating market confidence in New Zealand’s economic recovery.

The NZD/USD has been exhibiting an impulsive trend to the upside. Currently, the pair is potentially in wave ((iv)), which should ideally retrace no lower than the 38.2% Fibonacci level, positioned at 0.608. The maximum allowable retracement for this corrective wave should not go below 0.59848, which marks the extreme of wave ((i)) within this degree of trend.

If the NZD/USD respects these support levels, we can anticipate the completion of the impulse wave by finishing wave ((v)). This would complete wave 1 on the next higher degree of trend, suggesting continued bullish momentum as the pair progresses through its Elliott Wave cycle.