NZD/CAD:Potential Bullish Pullback Expected based on Fundamental

14 May 2023

According to economists, inflation in New Zealand is expected to remain high for an extended period, with increased government spending being a significant factor. While there are no current predictions for the next quarterly inflation figures due in July, the government is focused on maintaining fiscal sustainability and keeping inflation under control. As a result, the Reserve Bank of New Zealand (RBNZ) is likely to continue its hard-line approach to monetary policy by raising interest rates, which could have a positive impact on the New Zealand dollar.

From a technical perspective, the NZD/CAD price is currently within a bullish channel and is expected to retest the lower side of the dynamic trendline of support, which coincides with the 61.8% Fibonacci level. The RSI is also in oversold territory. Considering these technical indicators along with the fundamental aspects, our forecast suggests a possible pullback towards the bullish main trend, as seen on the daily charts.

20 May 2023

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