NZD/USD Pair Sees Downward Pressure Amid US Rate Hikes
The New Zealand dollar is under pressure in the currency markets, and technical analyst Christopher Lewis of DailyForex expects this trend to continue. The NZD/USD pair has been trading around the 0.57 level, a key psychological figure that has served as both support and resistance.
The 50-day EMA has broken down below the 200-day EMA, triggering what some traders refer to as a 'death cross.' However, Lewis does not place great emphasis on this indicator. The interest rate differential continues to favor the United States, with the Federal Reserve likely to raise rates again.
New Zealand's central bank, the RBNZ, is expected to remain dovish in its monetary policy, adding to the downward pressure on the NZD/USD pair. A breakdown below 0.57 could lead to a move towards 0.5650, while a break above 0.5750 opens up possibilities for a move to 0.58.
Lewis advises traders to fade rallies in this market, citing its highly leveraged nature and reliance on Asian markets. As the situation stands, he believes this is more of a 'fade-the-rally' setup waiting to happen.