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New Zealand Dollar Forecast: NZD/USD, NZD/JPY, NZD/CAD

New Zealand Dollar Forecast: NZD/USD, NZD/JPY, NZD/CAD

2020-03-10 21:30:00
Peter Hanks, Analyst
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New Zealand Dollar Price Outlook:

  • NZD/USD etched a massive trading range on Monday, swinging from 0.6450 to 6.0016
  • NZD/JPY saw similar volatility but has since recovered much of its losses
  • NZD/CAD also sank, but may offer bullish opportunities moving forward

New Zealand Dollar Forecast: NZD/USD, NZD/JPY, NZD/CAD

The New Zealand Dollar experienced remarkable volatility on Monday as stocks and crude oil collapsed. Despite emergency rate moves from other central banks, RBNZ Governor Adrian Orr announced on Monday the bank would not act until its scheduled March 25 meeting. Consequently, NZD pairs may be beholden to their counterparts as other countries explore further monetary and fiscal changes should volatility continue.

NZD/USD Price Outlook

Despite the prospect of further rate cuts from the Fed, Kiwi weakness may persist in NZD/USD as investors seek the relative safety of the world’s reserve currency. While the pair was able to retrace a massive move lower on Monday, resistance hangs overhead and risk aversion remains prevalent, two factors that could see the US Dollar win out.

NZD/USD Daily Price Chart (January 2018 – March 2020)

New Zealand Dollar Forecast: NZD/USD, NZD/JPY, NZD/CAD

To be sure, Monday’s extension lower was an encouraging technical development for traders pursuing further declines. However brief, the pair’s break beneath support at 0.62 should reduce the efficacy of the level moving forward as the area looks to provide initial assistance for the Kiwi. Subsequent support of note may exist at the intraday low established around 0.6016. Early levels of resistance will likely reside around the 200-day moving average at 0.6460 and beyond around 0.6500.

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NZD/JPY Price Outlook

NZD/JPY may also decline should risk aversion persist. In the event of a significant reversal in risk appetite, NZD/JPY may outperform other Kiwi crosses, but it would be presumptuous to suggest such a move at this stage without a palpable fundamental shift.

Therefore, NZD/JPY will likely look to consolidate beneath resistance around 70 while attempting to stay above support at Monday’s intraday low of 61.36 which should provide a modicum of support moving forward.

NZD/JPY Daily Price Chart (December 2016 – March 2020)

New Zealand Dollar Forecast: NZD/USD, NZD/JPY, NZD/CAD

NZD/CAD Price Outlook

In the pursuit of New Zealand Dollar strength, NZD/CAD may provide opportunity given the dismal state of crude oil and the potential impact on the Canadian economy. With that in mind, early resistance may materialize around 0.8787 which coincides with the lower bound of a descending channel from November 2016.

NZD/CAD Daily Price Chart (March 2018 - March 2020)

New Zealand Dollar Forecast: NZD/USD, NZD/JPY, NZD/CAD

On the other hand, potential support exists at the nearby horizontal level of 0.8493 before 0.8290 and 0.8243 will look to come into play.

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--Written by Peter Hanks, Junior Analyst for DailyFX.com

Contact and follow Peter on Twitter @PeterHanksFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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