The NZD/USD pair is trading near a two-week high around 0.5980 as market sentiment improves. The US Dollar is weakening ahead of the Federal Reserve’s policy meeting on May 1. Investors are also keeping an eye on New Zealand’s Q1 Employment data, which will influence the Kiwi Dollar’s next move.
The US Dollar Index (DXY) is hovering near key support at 105.50 due to concerns about the US economic outlook based on weak data. The S&P Global PMI survey for April and weak Q1 GDP data have contributed to this sentiment.
The focus is now on the upcoming Fed meeting, with expectations that interest rates will remain unchanged. Any guidance on interest rates will impact the US Dollar’s direction.
In New Zealand, investors are awaiting the Q1 Employment data release on Tuesday. The labor market is expected to have grown by 0.3%, slower than the previous quarter. The Labor Cost Index is forecasted to rise by 0.8%, indicating gradual price pressure growth.
The NZD/USD pair has seen a strong rebound after finding support around 0.5850. A Double Bottom formation has led to a bullish reversal, with the asset breaking above key resistance levels. The near-term outlook is positive as long as the asset holds above the 20-period EMA.
The RSI indicator suggests bullish momentum, with further upside potential towards resistance levels at 0.6000, 0.6050, and 0.6100. On the downside, a break below 0.5860 could lead to further declines towards support levels at 0.5847 and 0.5900.
Overall, the NZD/USD pair is trading at a two-week high, driven by improved market sentiment and upcoming economic data releases in both the US and New Zealand.