The NZDUSD pair continues to rise for the second straight day, trading near 0.5610 on Tuesday morning. This boost is partly due to China's recent economic support measures, as New Zealand's close trade ties with China mean its economy heavily influences the New Zealand Dollar. China's central bank officials have announced plans to use tools like interest rate adjustments and increased fiscal spending to stabilize their economy and keep the Yuan exchange rate steady, which has fueled market optimism.
After reports from US President-elect Donald Trump's team considered a gradual approach to raising import tariffs and easing fears of sudden inflation, the New Zealand dollar also gained from positive risk sentiment. Meanwhile, the US Dollar has eased slightly after hitting a high last seen in November 2022, supported by strong US labor market data and rising Treasury yields. At the same time, traders are waiting for December's US Producer Price Index (PPI) data, which could further influence the US Dollar's movements. Overall, the Kiwi Dollar remains strong amid global economic developments.
NZDCAD – H4 Timeframe
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The price action on the 4-hour timeframe of NZDCAD already shows an initial break below the previous low. The price is currently inching toward the supply zone at the origin of the bearish impulse. The said supply zone is in confluence with the 88% Fibonacci retracement level and trendline resistance.
NZDCAD – H1 Timeframe
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The SBR pattern on the H1 timeframe aligns perfectly with the sentiment from the 4-hour timeframe chart of NZDCAD. Here, we can see the sweep above the previous high, immediately followed by a bearish break of structure, further confirming the likelihood of a bearish continuation at the retest of the rally-base-drop supply zone.
Analyst's Expectations:
Direction: Bearish
Target: 0.80139
Invalidation: 0.81525
CONCLUSION
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