NZD/USD Update
On Tuesday, the NZD/USD pair saw a rebound, trading at approximately 0.5610, marking an increase of 0.42% for the day. This uptick follows a recent decline where the pair hit its lowest point since April 2025, dipping close to 0.5580. The recovery is happening against the backdrop of a weakening US Dollar, which has been pulling back after hitting an 18-month high during the previous session.
The US Dollar Index (DXY), which gauges the dollar’s value against six major currencies, is giving back much of Monday’s gains after surpassing 102.60. This pullback seems to be influenced by falling oil prices, which are helping to ease concerns about inflation in the US.
However, the New Zealand Dollar’s potential for growth might be somewhat restrained due to ongoing geopolitical uncertainties. Continuing tensions in the Middle East and the persistent conflict between Russia and Ukraine are generating risk aversion in the financial markets, which tends to adversely affect currencies like the Kiwi that are sensitive to global economic shifts.
The geopolitical climate has escalated following accusations from Ukrainian President Volodymyr Zelensky, who has claimed that Russia is violating an energy ceasefire, which was initially announced by former US President Donald Trump. Additionally, reports are coming in from Yemen about new drone and missile attacks by Iran-backed Houthi rebels.
In light of this, there could still be a demand for safe-haven assets, which may support the US Dollar despite its recent downward movement, potentially restricting further gains for the NZD/USD.
On the economic front, attention is now turning to the US Consumer Price Index (CPI) report for September, due for release on Wednesday. The upcoming figures might sway expectations regarding the Federal Reserve’s monetary policy. Currently, the market is fully anticipating a 25-basis-point interest rate increase in December, but stronger-than-expected core inflation could spark speculation about an earlier lift-off during the October 27-28 meeting.
NZD/USD Technical Analysis
Looking at the one-hour chart, the NZD/USD pair is trading at 0.5612 and maintains a slight bullish bias, remaining above both the 100-period simple moving average (SMA) at 0.5602 and the 200-period SMA at 0.5604. After recovering from earlier declines, the pair is edging upwards, with the Relative Strength Index (14) hovering around 62, which suggests a solid bullish momentum but not one that is overbought just yet.
On the upside, initial resistance is seen near the 0.5630 mark, followed by stronger resistance at 0.5649, with additional levels at 0.5686 and 0.5735 above that. Meanwhile, immediate support is located around the current price and the cluster formed by the 200- and 100-period SMAs between 0.5604 and 0.5602. Should the price drop further, deeper support levels are identified at 0.5580 and 0.5540, where buying interest might re-emerge if there’s a retreat.
