8 July 2025,03:19
Daily Market Analysis
8 July 2025, 03:19
Key Takeaways:
*The New Zealand dollar softened as markets brace for the RBNZ policy meeting, with most economists expecting rates to remain on hold at 3.25%.
*Tomorrow’s China CPI release could influence the NZD, with signs of Chinese economic recovery potentially offering near-term support for the currency.
Market Summary:
The New Zealand dollar softened in the latest session as investors turned cautious ahead of the Reserve Bank of New Zealand’s (RBNZ) key policy decision due tomorrow. Markets are widely expecting the central bank to hold interest rates steady at 3.25%, with 19 out of 23 economists in a recent survey forecasting no change.
The RBNZ has cut rates by a cumulative 225 basis points since last year as policymakers navigate an increasingly fragile global economic landscape, marked by geopolitical tensions in the Middle East and renewed tariff threats from the White House. These headwinds have pressured the Kiwi, which remains sensitive to shifts in global risk sentiment.
In addition to the RBNZ, markets are also closely watching China’s Consumer Price Index (CPI) release scheduled for tomorrow. An improvement in Chinese inflation could signal signs of economic revival, which may lend support to the Kiwi given New Zealand’s close trade ties with China.
The twin catalysts of the RBNZ decision and Chinese CPI could set the near-term tone for the New Zealand dollar.
Technical Analysis
The NZD/USD pair extended its decline, breaking below a critical liquidity zone and the previous swing low, signaling a structural shift and reinforcing a bearish outlook. The pair posted its largest single-session loss in two months before staging a modest technical rebound.
As long as NZD/USD remains capped below the 0.6045 level, the bearish bias is likely to remain intact. Momentum indicators also align with this view— the Relative Strength Index (RSI) has dropped toward the oversold territory, while the MACD has decisively broken below the zero line, both suggesting that downside momentum is building.
Traders will be watching for confirmation of further weakness or signs of stabilization near current levels.
Resistance levels: 0.6081, 0.6160
Support levels: 0.5970, 0.5925
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