On Thursday (February 27th) during the European trading session, the NZD/USD fell further after five consecutive days of decline, with trading levels remaining around 0.5680. The strong performance of the US dollar has become the main reason for the continued pressure on the New Zealand dollar. The rise of the US dollar is driven by increased domestic uncertainty, especially President Trump's vague statements on tariff policies, which have led to a risk averse market sentiment and boosted demand for the US dollar. In addition, the rise of US treasury bond bond yield also further supported the US dollar.

Fundamental analysis

In terms of fundamentals, the sustained decline of the NZD/USD is mainly influenced by the strong rebound of the US dollar and market risk sentiment. US President Trump's recent remarks about imposing tariffs on Europe and delaying tariffs on Canada and Mexico have increased uncertainty about the global economic outlook, exacerbating market risk aversion. At the same time, the dollar index (DXY) stood firmly above 106.50, and the yields of two-year and 10-year US treasury bond bonds were 4.10% and 4.29% respectively, indicating that the market's confidence in the US economy remained strong.

Raphael Bostic, Chairman of the Atlanta Branch of the Federal Reserve Bank of the United States, stated that the Federal Reserve should maintain the current level of interest rates to continue to pressure inflation. He pointed out that more data is needed to determine whether the inflation data for January is only a temporary fluctuation or the beginning of the inflation trend. Bo Stich's statement further strengthened market expectations for the Federal Reserve to maintain its tightening policy, providing more support for the US dollar.

On the New Zealand side, the ANZ Business Outlook Index for February 2025 rose to 58.4, a rebound from January's 54.4, marking the first increase in four months and demonstrating market confidence in New Zealand's economic recovery. Especially driven by low interest rates and strong commodity export prices, the economic outlook looks more optimistic.

Technical analyst interpretation:

From a technical perspective, the trend of the New Zealand dollar/US dollar continues its recent decline and remains under downward pressure. The current price is around 0.5680, close to the key technical level, indicating a downward trend in the market. From the daily chart, the overall technical trend is more favorable for bears.

The MACD indicator shows a sustained bearish signal. The intersection of fast and slow lines may form a dead cross, indicating heavy market selling pressure. The gradual weakening of the kinetic energy of the red column indicates that the selling pressure has not significantly decreased, and the downward trend may continue in the short term.

In terms of relative strength index (RSI), the current RSI value is below 50, although it has not yet entered the oversold zone, it is already approaching this level. Once the RSI value continues to decline, the bearish signal will further strengthen, which may trigger a deeper pullback.

In terms of support level, the current support level for the New Zealand dollar/US dollar is around 0.5672. If this support level is broken, the next important support level will be at the 0.5650 line. At the same time, if the price rebounds, the first resistance level in the short term is at 0.5722, followed by the 0.5771 area. Breaking through these resistance levels may temporarily alter the current downward trend and bring about a certain correction rebound.

In addition, if the price continues to fluctuate at the current low level without breaking through key support and resistance levels, the market may continue to maintain a downward trend of volatility.

conclusion

Overall, the recent weak trend of the New Zealand dollar/US dollar has been influenced by the strong rebound of the US dollar and the intensification of market risk aversion. Despite the slightly optimistic economic outlook in New Zealand, there is still pressure on the technical aspect. Pay attention to the breakthrough of support and resistance levels, as well as the changes in the trend of the US dollar. As market expectations for the Federal Reserve's monetary policy intensify, the future trend of the NZD/USD may continue to be driven by global risk sentiment.