NZD/USD Overview Ahead of The Reserve Bank of New Zealand Official Cash Rate

https://www.stats.govt.nz/indicators/consumers-price-index-cpi/[/caption]

According to Bloomberg’s World Interest Rate Projection Model, the probability of an RBNZ rate cut for the May 22^nd meeting stands at 1%; however, it increases as we approach year-end as more traders anticipate the cuts later in the year. The RBNZ Shadow Board members recommended that RBNZ keep the Official cash rate OCR at 5.5% and cut rates in 2025.

Please review the economic calendar for all releases and local times.

Weekly Chart Technical Analysis

• NZD has been trading within a widening formation as of January 2023, marked by red lines on the weekly chart, and is approaching the upper pattern borderline.
• A confluence of resistance lies within the range of 0.6170 – 0.6260, represented by the upper channel borderline, the standard monthly R2 and R3, and the annual pivot point at 0.6210.
• A potential inverted head and shoulder pattern is currently under formation, and its neckline aligns with the widening pattern of the upper borderline.
• Negative divergence between price action and tick volume; however, volume bars rose for the same duration. Tick volume does not represent real volume; however, it behaves similarly to standard volume indicators in certain cases.
• MACD line crossed above its signal line and aligned with price action.
• Price action broke and closed above multiple short and intermediate moving averages, the EMA9, SMA9, and the SMA20.

https://cotbase.com/[/caption]

COT Report

• The latest COT report for the week ending on May 17^th, 2024 (Includes data up to the end of day Tuesday, May 14^th, 2024) shows that Large Speculator and Commercials positioning levels are in line with price action after remaining at their all-time extremes for few weeks, a sharp change in positioning towards long for large speculators and the opposite for commercials.