NZD/USD Price Forecast: Remains above 0.5650, resistance appears at nine-day EMA
- NZD/USD tests the immediate resistance at a nine-day EMA of 0.5654.
- Neutral bias prevails as the 14-day RSI remains around the 50 level.
- A drop below 0.5650 could push the pair toward the rectangle’s lower boundary at 0.5550.
The NZD/USD pair edges lower after registering losses in the previous session, trading around 0.5650 during the European hours on Wednesday. The daily chart's technical analysis suggests market uncertainty, with buyers and sellers lacking a clear long-term direction as the pair consolidates within a rectangular pattern.
The 14-day Relative Strength Index (RSI) remains near the 50 level, signaling a neutral market stance with no strong buying or selling pressure. A decisive move in either direction could establish a clearer trend. Additionally, the NZD/USD pair continues to trade around the nine-day Exponential Moving Average (EMA), indicating neutral short-term price momentum.
The NZD/USD pair is testing a critical support level at 0.5650. A decisive break below this level could push the pair toward the lower boundary of the rectangle at 0.5550, with further support at 0.5516—its lowest level since October 2022, recorded on February 3.
On the upside, the NZD/USD pair is testing the nine-day EMA at 0.5654. A breakout above this level could strengthen short-term momentum, potentially driving the pair toward its nine-week high of 0.5794, reached on January 24. Beyond this, the next resistance levels lie at the psychological barrier of 0.5800 and the upper boundary of the rectangle at 0.5820.
NZD/USD: Daily Chart
New Zealand Dollar FAQs
The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.
The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.
Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.
The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.