The NZD/USD pair gives up its intraday gains and returns below the round-level figure of 0.5800 in Thursday’s early North American session. The Kiwi pair falls back as the US Dollar (USD) reverses losses even though traders have priced in the (Fed) to cut interest rates by 25 basis points (bps) to 4.25%-4.50% after the two-day monetary policy meeting on Wednesday.The Kiwi pair has been battered badly for more than two months and is wobbling near the two-year low. The asset has faced an intense sell-off as the outlook of the New Zealand Dollar (NZD) has weakened, given that the Reserve Bank of New Zealand (RBNZ) has reduced its Official Cash Rate (OCR) aggressively by 125 basis points (bps) to 4.25% in three policy meetings.The was compelled to follow an aggressive policy-easing cycle due to slowing inflationary pressures, weakening labor demand, and poor business activity.Meanwhile, the US Dollar performs strongly across the board on expectations that policies of higher import tariffs and lower income taxes by President-elect Donald Trump will be inflationary for the (US) economy. daily chart shows a Bullish Divergence formation, which suggests a slowdown in the selling momentum that results in a reversal move. While the asset has formed a lower low formation on a daily timeframe, the 14-day Relative Strength Index (RSI) has made higher lows. The formation needs confirmation to set off a bullish reversal.A decisive break above the November 29 high of 0.5930 could confirm a reversal setup and push it higher to the November 15 high of 0.5970 and the psychological resistance of 0.6000.However, the chances of a bullish divergence confirmation are weak due to unsupportive NZ fundamentals, which could take the Kiwi pair lower to the November 2022 low of 0.5740 and the round-level support of 0.5700 if it breaks below the two-year low of 0.5770.NZD/USD daily chart(Click on image to enlarge)More By This Author:EUR/USD Rises As ECB Interest-Rate Decision Looms EUR/GBP trades with caution near two-year low around 0.8250 ahead of ECB policy meetEUR/USD Slides On ECB Dovish Bets, Firm US Dollar Ahead Of US Inflation
NZD/USD Price Forecast: Reversal Setup On Chart But Will Unlikely Set Off
