NZD/USD Inches Higher Above 0.5700 as Fed Rate-Cut Expectations Build

Fundamental Overview

NZD/USD moves higher toward 0.5715 in early European trading on Tuesday, supported by broad US Dollar softness as markets increasingly expect another Federal Reserve rate cut this month.

The CME FedWatch Tool now reflects an 88% probability of a 25 bps cut to 3.50%–3.75%, compared to 63% just one month ago. This shift continues to pressure the USD and support the Kiwi.

Meanwhile, the Reserve Bank of New Zealand (RBNZ) lowered its OCR by 25 bps to 2.25% last week but signaled that the easing cycle may be nearing its end, citing early signs of economic stabilization. This relatively less-dovish stance provides underlying support to NZD.

Looking ahead, attention turns to China’s RatingDog Services PMI on Wednesday, expected to soften slightly to 52.0 from 52.6. A weaker reading could weigh on the China-sensitive New Zealand Dollar.

NZD/USD Technical Analysis – Daily Chart

Technical Overview

• NZD/USD is trading within an upward channel.
• Price is moving above the 50 & 100 SMAs.
• RSI: Bullish zone
• Stochastic: Neutral trend
• Immediate Resistance: 0.5752
• Immediate Support: 0.5662

How to Trade NZD/USD

On the higher timeframe, NZD/USD has staged a strong recovery after a sharp decline, breaking above key resistance with solid bullish momentum. The pair is now facing rejection and may retrace toward a key Fibonacci support zone. A rebound from that area could trigger continuation to the upside.

Trade Suggestion:
Limit Buy: 0.5666
Take Profit: 0.5752
Stop Loss: 0.5627

Disclaimer

This report is for informational purposes only and does not constitute financial advice. Trading forex and commodities involves significant risk and may not be suitable for all investors. Always perform your own analysis or consult a licensed financial advisor before making trading decisions.