FX.co ★ Tap | NZD/USD

The NZD/USD pair relinquished its gains from the preceding session, trading around the 0.5720 mark during early European trading on Friday. A technical analysis of the daily chart indicates an underlying upward bias, as the pair remains within a defined ascending channel pattern. However, the 14-day Relative Strength Index (RSI) has dipped below the 50 level, signaling a potential waning of upward momentum. Furthermore, the NZD/USD pair's position below its nine-day exponential moving average (EMA) suggests a weakening of short-term price momentum. Despite these short-term concerns, the broader uptrend remains intact, as the nine-day EMA continues to reside above the 50-day EMA. This configuration suggests that a continued recovery remains a plausible scenario. On the upside, a decisive break above the nine-day moving average, currently situated at 0.5738, could invigorate short-term momentum and propel the NZD/USD pair towards its three-month high of 0.5832, last encountered on March 18th. A breach of this level would pave the way for a test of the upper boundary of the ascending channel, located around 0.5900, which would serve as the next significant resistance.

Conversely, a break below the 50-day moving average, positioned at 0.5718, could undermine medium-term momentum and amplify downward pressure on the NZD/USD pair. This scenario could lead to a test of the psychological support level at 0.5700, with the lower boundary of the ascending channel near 0.5670 acting as the subsequent critical support level. A break below this channel would reinforce a bearish outlook and potentially drive the pair towards the monthly low of 0.5593, recorded on March 3rd. Adding to the pair's volatility, the US dollar experienced a decline following US President Donald Trump's announcement of a 25% tariff on imported cars and light trucks, scheduled to take effect on April 2nd. This move, coupled with other planned reciprocal tariffs, has heightened concerns regarding a potential escalation of a broader trade war, which could adversely affect global economic growth. The US Dollar Index (DXY), which tracks the greenback's performance against six major currencies, is currently reversing its recent gains, trading around 104.40. The dollar is further pressured by lower US Treasury yields, with the two-year and 10-year yields standing at 4.01% and 4.37%, respectively. The confluence of technical indicators, trade tensions, and US economic factors is creating a complex trading environment for the NZD/USD pair.