Since May 20 we have observed on the chart the formation of an upward trend, driven by a marked weakening USD. During the month investors expected a decrease in the FED's rate, although then, as it turned out, these expectations were overrated. The New Zealand dollar, in turn, remained under pressure amid the trade conflict between China and the United States, as well as the economic downturn in China and in New Zealand itself.
This week the dollar managed to consolidate on the results of the G20 summit, where China and the United States agreed to resume negotiations. Demand for risky assets rose slightly, but overall investors were dissatisfied with the results of the summit and the continuing uncertainty. Macroeconomic reports were mixed for the USD and did not contribute to a strong strengthening of the dollar. Nevertheless, the US economy is in a more favorable situation than the EU economy, China or directly, New Zealand, which makes investment in the USD more promising than investment in commodity currencies.
The New Zealand dollar continues to remain under pressure in the current situation. Decreases in the business activity in China, the prices of raw materials, and especially of dairy products and food, led to a weakening of the NZD. The continuing uncertainty around the trade conflict is also not conducive to the growth of the NZD. In addition, it is likely that the RBNZ will follow the Reserve Bank of Australia and reduce the rate by 25-50 pips this year, taking into account all of the negative external factors, but this won't happen until next month at the next meeting of the RBNZ.
In the current situation we can't see perspectives for the continuation and development of the uptrend, even if the US economy does not please investors. In the short and medium term, the most effective course of action would be the deals to sell, as evidenced by the majority of technical analysis tools.
