NZD/USD heads into Friday’s market off the low of a short-term consolidation.

• NZD/USD eased to the bottom of a sideways pattern on Thursday.
• Greenback strengthened as concerns revived about tapering Federal Reserve cuts.
• New Zealand consumer confidence and inflation expectations have recovered but remain low.

NZD/USD fell to the bottom of its recent consolidation as broader market risk appetite weakened on Thursday following a rise in the US Purchasing Managers’ Index (PMI). Investors hungry for interest rate cuts were initially hopeful. Interest rate cut expectations fell throughout the day, pushing risk assets lower and pushing the greenback to higher bids for the day.

Forex Today: Data Continues to Rule Sentiment

New Zealand will enter Friday’s early market session on the cheap, but a slight improvement in New Zealand’s consumer confidence could provide weak support. ANZ Roy Morgan consumer confidence in May rose to 84.9 from 81.9 in April. Despite the rebound, New Zealand consumer confidence remains low overall and remains close to levels seen during the pandemic response.

Read more: ANZ Roy Morgan consumer confidence rebounds to 84.9 in May.

Consumer inflation expectations for May also eased further, falling to 3.8% from 4.4% in April. Meanwhile, consumer home price inflation rose further, from 3.2% to 3.5%.

NZD/USD Technical Outlook

The kiwi has recently been churning sideways as the technical ceiling at 0.6140 has strengthened. The bid is finding technical support at the 200-hour exponential moving average (EMA) near 0.6089.

The daily candlestick is showing a squeeze pattern into the mid-range, trading at 0.6070, just north of the 200-day EMA.

NZD/USD hourly chart

NZD/USD daily chart