Will NZD/USD Break 0.5850 or Resume Its Downtrend?
NZD/USD rises to daily highs near 0.5830, remaining within its prior trading ranges.
FUNDAMENTAL OVERVIEW:
The New Zealand Dollar is edging higher during Friday’s European session, reaching fresh intraday highs just below 0.5830. While the immediate bias is positive, price action remains confined within Thursday’s ranges, reflecting limited upside momentum.
A moderate risk-on sentiment is supporting the Kiwi and weighing on the safe-haven US Dollar, which faces pressure from the ongoing government shutdown and signs of a cooling labor market, prompting expectations of looser Fed policy. With US economic data muted, Thursday’s Challenger Job Cuts drew attention, showing layoffs fell to 54,064 in September from 85,979 in August, while hiring plans dropped to 204,939—the lowest year-to-date reading since 2009.
Later, Dallas Fed President Lorie Logan tempered expectations for additional rate cuts, offering a brief boost to the USD. Nevertheless, markets largely anticipate Fed easing in October and likely December, keeping USD rallies contained. In New Zealand, a light economic calendar has not prevented market expectations that the RBNZ may need to ease policy to support slowing growth, limiting the Kiwi’s recovery potential.
NZD/USD TECHNICAL ANALYSIS DAILY CHART:
Technical Overview:
NZD/USD is trading within a down channel.
NZD/USD is moving below all the Moving Averages (SMA).
The Relative Strength Index (RSI) is in the Neutral Zone, while the Stochastic oscillator suggests a Neutral trend.
Immediate Resistance level: 0.5854
Immediate support level: 0.5754
HOW TO TRADE NZD/USD
After a sharp decline, NZD/USD found support and surged higher, breaking through resistance. However, the rally lacked follow-through, and the pair reversed, breaking a key support level. Currently, it is pulling back toward a major resistance zone. If NZD/USD faces rejection at this level, the downtrend could resume.