The outlook for the New Zealand Dollar (NZD) against the US Dollar (USD) is currently neutral, according to FX analysts at UOB Group. The NZD is expected to trade between 0.5685 and 0.5770. In the last 24 hours, the NZD reached a high of 0.5751 and closed at 0.5745, marking a 0.34% increase. Although there was a rise, the momentum was limited. For today, we anticipate a trading range of 0.5725 to 0.5755.

Trading Range Forecast

Over the next 1-3 weeks, we maintain our previous outlook with reduced downward pressure. The NZD is expected to continue trading between 0.5685 and 0.5770 for now. The FXStreet Insights Team gathers market observations from various experts. This content provides a balanced view from both commercial and independent analysts, highlighting market dynamics. Given the NZD is likely to trade sideways within the 0.5685 to 0.5770 range, there is an opportunity to sell volatility. Strategies like iron condors may work well here, aiming to profit from the currency pair remaining within this defined channel over the coming weeks. This perspective is supported by the recent inactivity of central banks. In its October meeting, the Reserve Bank of New Zealand kept its Official Cash Rate at 5.50%, aligning with the cautious approach of the Federal Reserve. Last week’s data showed New Zealand’s quarterly inflation at 0.8%, meeting expectations and offering no reason for a breakout. This economic stalemate is keeping the currency pair stable.

Market Influences and Historical Context

A slight rebound in dairy prices, with the Global Dairy Trade index rising by 1.2% in the first auction of October, provides some support for the kiwi dollar, though it doesn’t create breakout potential. Implied volatility for NZD/USD options has also decreased, recently hitting multi-month lows around 8.7%. This low-volatility environment makes selling premiums appealing. We have seen similar conditions before, especially in the second half of 2023, when both central banks paused after aggressive rate hikes. During that time, the NZD/USD established a multi-month range, rewarding traders who positioned for sideways movement. This historical context strengthens our confidence in a range-trading strategy today. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now