NZD/USD is trading lower as the market reacts to the Q1’21 NZIER Business Confidence Index. The index, which is an indicator of New Zealand’s economic health came in at -13%, which is lower than -6% in Q4’20.
Besides, the US dollar has strengthened amid rising bond yields. On Tuesday, the benchmark 10-year US bond yields were up by 0.88% at 1.69. The surge has offered support to the greenback, which is trading higher by 0.12% at 92.25.
Later in the day, NZD/USD will be reacting to the US core CPI data. Analysts expect a reading of 0.2%, up from February’s 0.1%. A higher-than-expected number will further strengthen the greenback against the New Zealand dollar.
Furthermore, investors are eyeing the RBNZ interest rate decision. The Reserve Bank of New Zealand is set to maintain interest rates at the current 0.25%. However, the focus will be on its tone, at a time when it is striving to deal with the soaring housing prices.
NZDUSD Technical Outlook
NZD/USD has been range-bound since the beginning of April. The pair has been trading between 0.7000 and 0.7070. On a three-hour chart, it is below the 20 and 50-day exponential moving averages. Notably, the 20-day EMA has crossed over the 50-day EMA to the downside.
At the time of writing, USD/NZD was trading lower by 0.18% at 0.7018. With the formation of the rectangular pattern, the outlook is rather neutral. The pair may remain range-bound in today’s session as investors await tomorrow’s RBNZ interest rate decision. On the lower side, a move past 0.7000 will place the next target at 0.6945. On the flip side, a surge above 0.7100 will result in an uptrend. If that happens, the next target will be 0.7141.