NZDUSD Forecast: Reversal Likely with Upcoming NFP

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As traders eye the upcoming Non-Farm Payrolls (NFP) report, the NZDUSD forecast becomes increasingly pivotal. The NZD/USD currency pairing is edging towards a notable shift, potentially ending a persistent three-week decline. Despite a minor slip in early trading sessions, with the pair slightly below the $0.59 benchmark due to a downtrend in US equity futures, the pair has consistently gained over the last three days. It’s nearing a two-week high, signaling a possible change in tide above the 0.5900 level.

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Market Outlook and NZDUSD Forecast

The recent uptick in the NZDUSD forecast can be attributed to a weakening US dollar and a bullish equity market. The pair’s breach past the 20-Day Exponential Moving Average (EMA) at $0.5875 has bolstered bullish sentiment, with targets now set on the early November high of $0.5917 and the psychologically important $0.60 mark. On the flip side, the bearish outlook remains focused on the 20-Day EMA and the $0.58 support.

The NZDUSD forecast hinges on the highly anticipated NFP report, expected to significantly influence the Federal Reserve’s next move on interest rates and, by extension, the US dollar’s trajectory. Current market dynamics, such as the dip in US Treasury yields and a private-sector survey suggesting growth in China’s business sector, are lending support to the NZD.

However, apprehensions about China’s economic slowdown and lackluster domestic employment figures, which may indicate an unaltered policy rate by the Reserve Bank of New Zealand (RBNZ), are factors that could restrain the NZDUSD’s upward movement.

Political Developments and Economic Data

From a political standpoint, the New Zealand Nationals’ loss of two seats in the final election count is creating a need for collaboration with other parties for government formation, a factor that market observers will monitor closely. Furthermore, the forthcoming release of significant economic indicators, including Q4 Inflation Expectations, October Manufacturing PMI, and Card Spending data, will be critical for next week’s NZDUSD forecast.