The NZD/USD pair is currently trading within a range. In the short term, it is expected to stay between 0.5630 and 0.5680. Over a longer period, the range is predicted to be 0.5605 to 0.5695. Recent trends show that the NZD has become stable, and analysts from UOB Group support this view.

FXStreet Insights Team

The FXStreet Insights Team is made up of journalists who gather market insights from experts. Their daily newsletter provides valuable information about currency markets and related topics. FXStreet also covers various market updates, such as changes in gold prices, fluctuations in the US dollar, and central bank policies impacting currencies. The site shares forecasts on different currency pairs, emphasizing key market factors and data. In the upcoming weeks, we expect the NZD/USD pair to remain in a consolidation phase. There is no strong direction indicated, and the price should stay within 0.5605 to 0.5695. This lower volatility is due to major central banks like the Fed and the RBNZ taking a cautious approach.

Calm Market Environment

This perspective is backed by recent economic data that hasn’t surprised anyone. Last week, the US Core PCE inflation rate for October was 2.6% year-over-year, exactly as expected. This has not changed the Federal Reserve’s neutral stance. Compared to the aggressive rate hikes of 2023, the current market is much calmer. In New Zealand, the situation is similar, supporting the range-bound price behavior. Recent quarterly employment data showed a slight dip in the labor market, easing pressure on the Reserve Bank of New Zealand. With dairy prices stable, recovering from mid-2024 lows but not rising further, the NZD lacks its own momentum. Given this sideways trend, strategies that benefit from time decay and low volatility are attractive. For instance, we could sell options at the extremes of the expected 0.5605 to 0.5695 range. An iron condor, selling a call spread above 0.5700 and a put spread below 0.5600, could be structured to profit if the pair stays within this range. The primary risk here is a sudden economic shock or an unexpected change in tone from either the Fed or RBNZ. We will closely monitor upcoming US retail sales data and comments from central bank officials. A breakout above 0.5700 or a drop below 0.5600 would indicate that the current range has broken and we may need to adjust our strategy. Create your live VT Markets account and start trading now.

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