• NZD/USD edged lower on Thursday as high energy prices and a hawkish tilt at the U.S. Federal Reserve pressured kiwi dollar.
• A key driver behind the move has been the sharp rise in oil prices, with WTI crude climbing above $108 per barrel. This surge is linked to escalating fears of a prolonged conflict involving Iran, after comments from Donald Trump suggested the possibility of a “months-long” blockade.
• Higher energy prices tend to fuel global inflation concerns, which in turn support the U.S. dollar by reinforcing expectations that interest rates may stay elevated for longer.
• On the monetary policy front, the Federal Open Market Committee maintained its current policy stance, leaving the federal funds rate unchanged. While the committee retained a general easing bias, the decision saw increased dissent among members.
• Meanwhile, RBNZ rate expectations have shifted notably. Futures markets now indicate that the probability of a rate hike in May has eased to around 50%, reflecting a more cautious outlook among investors.
• Immediate resistance is located at 0.5846(50%fib), any close above will push the pair towards 0.5890(April 29th high).
•Support is seen at 0.5746(38.2%fib) and break below could take the pair towards 0.5725(Lower BB).
Recommendation: Good to sell around 0.5830 with stop loss of 0.5890 and target price of 0.5750
