The NZD/USD pair dropped to around 0.6130 during the American session on Wednesday. The New Zealand Dollar weakened ahead of the Q1 GDP data release, which is expected to show the NZ economy remaining stagnant. This could lead to early rate cuts by the Reserve Bank of New Zealand (RBNZ), which has kept its OCR at 5.5% due to inflationary pressures.
In the US, the USD slightly declined in thin trading due to the Juneteenth holiday. The USD Index held support at 105.00, but uncertainty looms as the market anticipates potential interest rate cuts by the Federal Reserve this year.
This week, the US Dollar’s performance will be influenced by the release of preliminary S&P Global PMIs for June, which are expected to show a decline in the Composite PMI.
NZD/USD is currently trading within a Broadening Triangle pattern, with support at around 0.6100 and resistance at 0.6140. The 200-period EMA at 0.6101 is supporting the Kiwi bulls, while the RSI near 40.00 suggests a potential bearish momentum if it falls lower.
A break below 0.6100 could push the pair towards 0.6050 and 0.6000 levels. Conversely, a reversal above 0.6222 could lead to further gains towards 0.6250 and 0.6280 levels.
Overall, market participants are closely watching the upcoming economic data releases and central bank decisions for further direction in the NZD/USD pair.