NZD/USD to inch higher gradually towards 0.6260 – SoGen

NZD/USD scaled 0.62 handle for the first time since early August following the Reserve Bank of New Zealand (RBNZ) Monetary Policy Statement. Economists at Société Générale analyze Kiwi’s outlook.

RBNZ does not rule out another 25 bps hike

The RBNZ left the OCR unchanged at 5.50% but the updated forecast by the central bank was hawkish projecting a possibility of another 25 bps and no rate cut until 2Q25 vs. 1Q25 earlier.

Daily MACD has been posting positive divergence and has crossed above equilibrium line. These signals point toward potential upside.

The pair is expected to inch higher gradually towards 0.6260 and the trend line drawn since 2021 near 0.6380/0.6400 which could be an important resistance zone.

Upper part of previous range near 0.6050 should cushion near term downside.