As we head into Tuesday, February 18, 2025, global forex markets are poised for potential volatility, with traders closely watching central bank developments, economic data, and market sentiment. Key highlights include the RBNZ Interest Rate Decision, UK labor market data, and recent economic figures from the U.S. and Japan.
The NZD/USD pair experienced a strong rally following the RBNZ’s decision to cut rates from 4.25% to 3.75%, signaling a more dovish stance. Meanwhile, USD/JPY extended its decline amid stronger-than-expected Japanese GDP data, fueling speculation about potential monetary tightening. The AUD/USD pair also saw increased volatility after the RBA Interest Rate Decision, with traders digesting the latest employment and economic indicators.
NZD/USD
Technicals in Focus
The NZD/USD pair experienced a sharp bullish move following the RBNZ’s interest rate cut, as traders adjusted their expectations. The price surged past key resistance levels before stabilizing near the 0.5738 region.
- MACD: Shows strong bullish momentum, with the MACD line crossing above the signal line.
- Stochastic Oscillator: Currently in the overbought zone, suggesting a possible retracement.
- 14-day RSI: Trading near 70, indicating that bullish momentum may slow down.
Trading Strategy: Neutral to Buy
- Buy above 0.5730-0.5700, targeting 0.5760-0.5780, with a stop loss below 0.5670.
- Alternatively, sell below 0.5700, targeting 0.5680-0.5660, with a stop loss above 0.5730.
USD/JPY
Technicals in Focus
The USD/JPY pair saw a significant decline, dropping towards the 151.39 level amid strong Japanese GDP data, which boosted the yen. The pair remains in a downtrend, with selling pressure evident.
- MACD: Bearish crossover, indicating strong downward momentum.
- Stochastic Oscillator: Near oversold territory, suggesting the potential for a short-term bounce.
- 14-day RSI: Trading below 40, reflecting continued bearish sentiment.
Trading Strategy: Neutral to Sell
- Sell below 151.50-151.30, targeting 151.00-150.80, with a stop loss above 151.80.
- Alternatively, buy above 151.80, targeting 152.20-152.50, with a stop loss below 151.50.
AUD/USD
Technicals in Focus
The AUD/USD pair remains volatile after the RBA Interest Rate Decision, with price stabilizing around the 0.6363 region. Despite a bullish move earlier, the pair is showing signs of consolidation.
- MACD: Shows declining bullish momentum.
- Stochastic Oscillator: Neutral, offering no clear directional bias.
- 14-day RSI: Holding near 50, indicating range-bound movement.
Trading Strategy: Neutral
- Buy above 0.6360-0.6340, targeting 0.6380-0.6400, with a stop loss below 0.6320.
- Alternatively, sell below 0.6340, targeting 0.6320-0.6300, with a stop loss above 0.6360.
Market Outlook
Looking ahead, traders will focus on:
- UK CPI Data (Wednesday) – Key inflation data could impact GBP/USD and overall market risk sentiment.
- U.S. Jobless Claims & Philly Fed Manufacturing Index (Thursday) – Expected to provide insight into U.S. economic strength.
- RBNZ’s Policy Outlook – Further rate cuts or dovish comments could continue influencing NZD pairs.
With ongoing central bank movements and economic data releases, traders should expect increased volatility and potential trend shifts in the coming sessions.