The situation for the NZD has not changed yet. The rates continue to be in the frames of a downward trend, though it lost its intensity. The American dollar continues to strengthen against the NZD, although we cannot say that the New Zealand economy is in a bad state. Despite the rising inflation, the country's economy gradually develops and demonstrates growth. However, this does not allow the New Zealand currency to hold against the strong U.S. dollar.
Last week the dollar strengthened amid the positive statistics about unemployment and the results of the Federal Reserve meeting, which decided to leave interest rates unchanged, but considering the certain growth of the US economy as well as the reduction in unemployment, the Fed plans to hike rates in June if nothing changes. Therefore, the probability of a rate increase is very high.
At the moment the rates of the NZD/USD have stabilized in the range of 0.688-0.694 USD. We can also say that these levels are also good entry points to the market. Until tomorrow volatility will be low because investors are waiting for the meeting of the Federal Reserve Bank of New Zealand (RBNZ) and their decision regarding changing the rate. Now it's 1.75%. Investors don't expect rate changes because the RBNZ in March said that they don't not plan to change the rate until the 2019. Still, continued weakening of the NZD can make them change their mind because a rate increase would strengthen the NZD. Oscillators are neutral for the moment. In this situation the best solution is to open the deals on the trend. We can say that also considering that there're no real reasons for the trend change and strengthening of the NZD in the near future. Therefore, the deals to SELL can be the most effective now in short- and medium-term trading.
