As a risk-sensitive currency, the New Zealand dollar (NZD) experienced a decline following reports of US House of Representatives Speaker Nancy Pelosi's visit to Taiwan, which is seen as increasing US-China tensions and putting pressure on the global economy.
However, the latest data published at the start of the Asian session this morning (Wednesday) saw New Zealand's unemployment rate at 3.3% for the second quarter, rising again from 3.2% which was the lowest level since it began in 1986.
The Reserve Bank of New Zealand (RBNZ) is expected to raise interest rates by 50 basis points for the fourth time in a row later this month, which will take interest rates to 3.00%.
The kiwi dollar dipped after the report was published before rebounding to resume trading at the opening of the European session.
The price movement for the NZD/USD currency pair has recorded a decline in Tuesday's trading yesterday after the price previously recorded a new 6-week high on the move earlier in the week reaching the 0.63500 level.
However, the price failed to maintain the strengthening pattern after a bearish pattern was shown yesterday as a result of reports on Pelosi's visit to Taiwan, which made the market sentiment at risk of strengthening the US dollar and weakening the Kiwi dollar.
Investors assess the signal of a change in the bearish trend with the price moving back below the support level of the Moving Average 50 (MA50) on the 1-hour time frame on the NZD/USD chart with the expectation that further declines will continue in the following sessions.
If the price decline continues, the price is likely to test the support zone at 0.62000 which was seen as the price support level during last week's trading.
If the price manages to break through the support zone, a lower decline is seen to shrink to the concentration zone around 0.61500 to record the latest 2-week low.
On the other hand, if the price shows a stronger increase again, the 0.63500 barrier zone reached at the beginning of the week is still seen as a resistance that will be tested before the increase is extended to the latest high level.
For a higher bullish target, the price is expected to make a surge up to the 0.64200 zone to record a recent 8-week high.
