NZD/USD Weakens Ahead of RBNZ Rate Decision.
NZD/USD Price Outlook: Pair Under Pressure as Traders Turn Cautious Ahead of RBNZ Policy Decision.
FUNDAMENTAL OVERVIEW:
The NZD/USD pair reversed early gains, falling toward 0.5820 during Monday’s late European session as traders turned cautious ahead of Wednesday’s Reserve Bank of New Zealand (RBNZ) policy announcement.
Markets widely expect the RBNZ to cut its Official Cash Rate (OCR) by 25 basis points to 2.75%, marking the second consecutive rate reduction. Expectations for further easing have strengthened amid weakening economic data, with New Zealand’s GDP contracting by 0.9% in Q2—matching the previous quarter’s growth rate and missing forecasts for a smaller 0.3% decline.
Meanwhile, the US Dollar (USD) strengthened on safe-haven demand as political tensions in France weighed on market sentiment. The US Dollar Index (DXY), which tracks the Greenback against six major currencies, climbed 0.7% to around 98.40. Domestically, concerns over a potential US government shutdown and warnings of large-scale layoffs from the White House have also fueled risk aversion.
Technically, NZD/USD failed to extend its four-day winning streak and now faces resistance near the 20-day Exponential Moving Average (EMA) at 0.5847, suggesting a bearish short-term outlook. A break below the 0.5800 level could open the door to further declines toward 0.5754 and 0.5700. Alternatively, a rebound above the psychological 0.6000 mark may pave the way toward 0.6040 and 0.6100.
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: 0.5852
Immediate support level: 0.5753
HOW TO TRADE NZD/USD
After a steep drop, NZD/USD found support and rebounded sharply, breaking above a key resistance level. However, the upside momentum quickly faded, leading to a reversal that pushed the pair below crucial support. The pair is now retracing toward a major resistance zone, where a rejection could trigger a continuation of the broader downtrend.
