NZD/USD Steady Above 0.5850 on Fed Cut Hopes

NZD/USD holds steady above 0.5850, supported by improved risk sentiment and rising expectations of Fed rate cuts

FUNDAMENTAL OVERVIEW:

The New Zealand Dollar maintained a positive tone against the US Dollar on Monday, extending its rebound from Friday’s dip below 0.5800 into the upper 0.5800 range. A softer Greenback, fuelled by Fed cut expectations and upbeat New Zealand retail sales data, continued to support NZD strength.

The US Dollar weakened after Friday’s sharp reversal, following dovish remarks from Fed Chair Jerome Powell at Jackson Hole. For the first time this year, Powell emphasized downside risks to growth over inflationary pressures, signaling the possibility of a less restrictive policy stance.

This shift boosted hopes of a September rate cut, sparking a risk-on mood that carried into Monday. Meanwhile, New Zealand’s Q2 Retail Sales added further momentum, showing a 0.5% quarterly increase—slowing from 0.8% previously but beating forecasts for a sharper drop to 0.2%.

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 Neutral Zone, while the Stochastic oscillator suggests Neutral trend.

Immediate Resistance level: 0.5910

Immediate support level: 0.5797

HOW TO TRADE NZD/USD

After a sharp decline, NZD/USD found support and staged a strong rebound, breaking key resistance and holding higher until facing rejection from the upside. The pair has since broken a critical support zone and is trading below it. Currently in a pullback phase, any renewed rejection could trigger further downside continuation.

TRADE SUGGESTION- LIMIT SELL – 0.5889, TAKE PROFIT AT- 0.5800, SL AT- 0.5942.