NZD/USD. Price Analysis. Forecast. NZD/USD Rises for the Tenth Consecutive Day

[Ben Graham]

On Thursday, the NZD/USD pair continued its upward trend, gaining 0.50% and marking its tenth day of consecutive growth. The pair's dynamics are largely driven by the strengthening of the New Zealand dollar following unexpectedly strong foreign trade data, while the US dollar receives support from mixed fundamentals.

Fresh reports for December showed a trade surplus of 52 million New Zealand dollars compared to a deficit of 163 million the month before, with exports at 7.65 billion and imports at 7.60 billion. This progress in the trade balance underscores the growth in external demand and strengthens the New Zealand dollar against the US dollar.

On the other side of the pair, the Federal Reserve left the base rate unchanged at its first meeting of the year, emphasizing increased confidence in the dynamics of economic activity and the labor market.

Jerome Powell, the Fed's chair, indicated that monetary policy lacks a preset plan and that future steps will be determined solely by incoming data, which the markets interpreted as a moderately hawkish signal. Additionally, US labor market data show a decrease in initial jobless claims to 209,000 for the past week and a reduction in continuing claims to 1.827 million - a low since September 2024 - which supports the US dollar and restrains the growth of the NZD/USD pair.

Further support for the US currency comes from Treasury Secretary Scott Besant's statements on Washington's strong commitment to a strong-dollar policy. Still, the markets' expectations of two Fed rate cuts this year support the NZD/USD pair's positive short-term trajectory.

From a technical perspective, the pair has broken through the resistance zone and is approaching the July highs. However, oscillators on the daily chart are in the overbought zone, indicating the likelihood of consolidation. Nonetheless, the MACD histogram continues to increase its momentum, confirming the potential for further gains.

Below is a table showing the percentage changes of the New Zealand dollar against key currencies for the day. The New Zealand dollar achieved the largest increase against the US dollar.

The material has been provided by InstaForex Company - www.instaforex.com