NZDUSD Technical Analysis - The USD does the opposite of what it was supposed to do | Forexlive

The NZ dollar versus US dollar pair is currently hovering slightly below a resistance area, on the chart. What do you think will happen next?

The value of the US Dollar has decreased overall after the market reversed most of the gains it had made following Trumps win, which's quite surprising given that Trumps strategies are expected to boost economic growth and could lead to an earlier end, to the Federal Reserves easing measures.

It could be said that the market was already prepared for a Trump victory since we observed the strengthening of the dollar in the weeks preceding the US election.The current reaction might simply be a case of "selling on the news ". The market may require additional factors to continue supporting the USD.

It could also be that the market is currently placing emphasis on worldwide expansion which typically leads to a negative outlook, for the US dollar currency value. A comparable situation occurred back in 2016 when the USD experienced a surge after Trumps election victory but eventually entered a prolonged two year decline phase afterwards.

The Federal Reserve is currently maintaining a stance and is set to continue reducing interest rates as planned for now. Yesterdays 25 basis points rate cut was in line with expectations. The overall message has been fairly neutral; therefore the market anticipates another 25 basis points cut in December. However if there is positive data leading up to the December meeting their plans, for 2025 could potentially be altered.

We'll be looking out for the US CPI report coming up week as it could be quite a telling moment for us all. If we see the US Dollar weakening due to data releases it might signal that the market is shifting its attention towards worldwide economic expansion rather than anticipating an earlier halt, in the Federal Reserves policy of interest rate cuts.

Looking at the chart reveals that NZDUSD initially dropped sharply following Trumps victory but then turned upwards to challenge the crucial resistance area near the 0..6050 mark. At this point in time it seems that sellers are getting ready for a decline towards the 0..5850 level. However on the side buyers are hoping for a breakout above this range to boost their bullish positions, towards the 0..6217 resistance level.

Looking at the 4 hour chart provides a view of the recent price movements as the price shows resistance to a crucial zone of values We may need to zoom in for a closer look, at additional details as theres not much more to elaborate here.

Looking at the chart for one hour shows a trendline that indicates the current positive momentum and a support area near the 0 5975 level where we can also see the 61 6 percent Fibonacci retracement level, for confirmation purposes.

When the price reaches that level buyers are likely to intervene with a risk set below the trendline in preparation for a breakthrough above the resistance level. Conversely sellers will be looking for a price movement to amplify their bearish positions, towards new lows. The red lines indicate todays daily range.

Today marks the end of the week as we delve into the update, from the University of Michigan regarding Consumer Sentiment.