NZD Struggles as US-China Tariff Truce Lifts

Summary – NZDUSD

• Current Price: ~0.5870
• Resistance Levels: 0.5890 (previous higher low), 0.5915, 0.5950
• Support Levels: 0.5860 (200-day EMA), 0.5803 (April 4 high), 0.5730 (April 11 low)

NZDUSD broke below a Double Bottom neckline (~0.5890) and is now testing the 200-day EMA (~0.5860). A daily close below this level would confirm a bearish trend shift, exposing 0.5803 and 0.5730 as the following downside targets.

Fundamental Factors Affecting NZD

1. US-China Trade Truce Supports USD
   • The 90-day tariff reduction and pause in further escalations between the U.S. and China sparked risk-on sentiment and boosted global growth hopes.
   • The U.S. Dollar Index (DXY) surged above 101.50, its highest in over a month, reflecting the Greenback's renewed demand.
2. U.S. Economic Confidence
   • The S&P 500's sharp gains and strong DXY performance underline market optimism.
   • Lowered tariff pressures may dampen U.S. inflation expectations, allowing the Fed to hold rates steady.
3. New Zealand – RBNZ Dovish Bias
   • The RBNZ is expected to ease further, with traders pricing in at least one more rate cut in the coming months.
   • While the trade truce supports risk sentiment, it may only marginally benefit the NZD if RBNZ policy remains restrictive and data weak.

Key Takeaway for Traders

The NZDUSD outlook leans bearish as the US-China tariff truce strengthens the USD and RBNZ, easing expectations and limiting the NZD upside. Technically, a break below the 200-day EMA (~0.5860) would confirm a shift to bearish structure, opening room toward 0.5803 and 0.5730.

EURNZD – H4 Timeframe

On the daily timeframe chart, EURNZD has reached a critical area of demand, which overlaps the 100-day moving average support, and looks to commence a bullish reaction from said demand zone. The presence of a Fair Value Gap right behind the break of structure is another confluence worth considering.

EURNZD – H4 Timeframe

The 4-hour chart of EURNZD price action shows a trendline support formed and the usual SBR pattern, which I'm sure we've all become acquainted with. The demand zone, SBR pattern, and the liquidity sweep below the induced low are the final confirmations of a bullish intention.

Analyst's Expectations: 

Direction: Bullish

Target- 1.96189

Invalidation- 1.86724

CONCLUSION

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