CFD Trading Rate New Zealand Dollar vs US Dollar (NZDUSD)

The New Zealand Dollar (NZD) still seems weak; it remains to be seen if it has enough momentum to reach the next major support at 0.6075, UOB Group Quek Ser Leang and Peter Chia note.

NZD can reach the next major support at 0.6075

24-HOUR VIEW: “NZD fell sharply on Monday. Yesterday (Tuesday), we highlighted that ‘the decline has not stabilised, but severely oversold suggests any decline is probably part of a lower trading range of 0.6105/0.6165.’ NZD then traded between 0.6113 and 0.6169, closing at 0.6126 (- 0.55%). Tentative signs of slowing momentum combined with the still oversold conditions suggest NZD is likely to trade in a range today, expected to be between 0.6110 and 0.6165.”

1-3 WEEKS VIEW: “Our update from yesterday (07 Oct, spot at 0.6125) is still valid. As highlighted, while NZD still seems weak, it remains to be seen if NZD has enough momentum to reach the next major support at 0.6075. Overall, only a breach of 0.6195 (no change in ‘strong resistance’ from yesterday) would mean that the NZD weakness from the middle of last week has stabilised.”

• NZD/USD falls to a monthly low near 0.6100 as traders brace for the RBNZ’s policy decision.
• The RBNZ is expected to reduce its OCR further by 50 bps to 4.75%.
• Investors await the US inflation data for fresh guidance on the Fed’s interest rate outlook.

The NZD/USD pair hits the monthly low near the round-level support of 0.6100 in Tuesday’s North American session. The Kiwi pair weakens as the New Zealand Dollar (NZD) is under pressure ahead of the Reserve Bank of New Zealand’s (RBNZ) policy decision, which will be announced on Wednesday.

The RBNZ is expected to cut its Official Cash Rate (OCR) by a larger-than-usual size of 50 basis points (bps) to 4.75% as the central bank is focused on reviving economic growth. The board also reduced its borrowing rates unexpectedly by 25 bps in August.

Meanwhile, weakness in Chinese markets due to the unavailability of specific details for allocation of funds in the stimulus package of 200 billion yuan unveiled by Chairman of the National Development and Reform Commission (NDRC) Zheng Shanjie on Tuesday after the long National Day holiday has failed to prompt recovery in the Kiwi dollar.

On the United States (US) front, the US Dollar (USD) struggles to extend its upside, with investors focusing on the Consumer Price Index (CPI) data for September, which will be announced on Thursday. The inflation data will influence market expectations for the Federal Reserve’s (Fed) interest rate outlook for the remaining year. The core CPI – which excludes volatile food and energy prices – is estimated to have grown steadily by 3.2%.

NZD/USD extends its losing streak for the sixth trading session on Tuesday. The Kiwi pair has discovered temporary support near the 200-day Exponential Moving Average (EMA) around 0.6100.

The 14-day Relative Strength Index (RSI) has declined to near 40.00. A bearish momentum would trigger if the oscillator slips below the above-mentioned level.

More downside would appear if the pair breaks below the horizontal support plotted from September 11 low around 0.6100. The asset would decline further towards May 3 high of 0.6046 and the psychological support of 0.6000 if it breaks below September 11 low.

On the flip side, a reversal move above the 20-day EMA at 0.6230 will drive the asset towards September 3 high of 0.6302 and September 30 high near 0.6380.

NZD/USD daily chart

“RBNZ policy decision is due tomorrow at 9am (SGT). New Zealand Dollar (NZD) was last at 0.6118 levels, OCBC’s FX strategist Christopher Wong notes.

RBNZ to quicken the pace of rate cuts to 50bp

“Markets are largely expecting the RBNZ to quicken the pace of rate cut to 50bp each at the remaining 2 MPCs for the year and another 100bp cut cumulatively for 1H 2025. NZIER’s quarterly survey of business opinions says that only a net 3 percent of firms were able to raise prices to pass on costs, down from 23% in previous quarter.”

“The same report also indicated that significant proportions of firms are now reporting it easy to find skilled and unskilled labour. With dovish expectations already in the price and Kiwi having corrected >2% in the last week, the NZD risks being a “sell on rumor, buy on fact” into the policy decision unless RBNZ doubles down on dovish rhetoric.”

Bearish momentum on daily chart intact while decline in RSI shows signs of turning from near oversold conditions. Support comes in at 0.61 (200 DMA), 0.6070 levels. Resistance at 0.6160 (50 DMA), 0.6620 (21 DMA).

Oversold conditions suggest any decline in the New Zealand Dollar (NZD) is part of a lower trading range of 0.6105/0.6165. In the longer run, NZD still seems weak; it remains to be seen if it has enough momentum to reach the next major support at 0.6075, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann note.

NZD still seems weak

24-HOUR VIEW: “We did not anticipate the sharp drop in NZD that sent it plummeting to 0.6113 (we were expecting range trading). The decline has not stabilised, but severely oversold suggests any decline is probably part of a lower trading range of 0.6105/0.6165. In other words, a clear break below 0.6105 or above 0.6165 is unlikely.”

1-3 WEEKS VIEW: “Yesterday (07 Oct, spot at 0.6160), we highlighted that the recent price action “continues to suggest further NZD weakness, albeit at a slower pace.” We pointed out that “the levels to watch are 0.6135 and 0.6105.” We did not expect the continuing rapid decline, as NZD fell to a low of 0.6113. While NZD still seems weak, it remains to be seen if NZD has enough momentum to reach the next major support at 0.6075. On the upside, if NZD breaks above 0.6195 (‘strong resistance’ level was at 0.6220 yesterday), it would mean that the NZD weakness from the middle of last week has stabilised.”

• NZD/USD turns lower for the sixth straight day in reaction to not so not-so-optimistic Chinese economic outlook. 
• A modest USD downtick could lend support to the pair, though bets for a 50 bps RBNZ rate favor bears.
• Diminishing odds for an aggressive Fed easing limits the USD slide and validates negative bias for the pair.

The NZD/USD pair attracts some sellers following an Asian session uptick to the 0.6145 region and drifts into negative territory for the sixth successive day on Tuesday. Spot prices drop to a one-month low in the last hour, with bears awaiting a sustained break below the technically significant 200-day Simple Moving Average (SMA), around the 0.6100 mark, before placing fresh bets. 

The National Development and Reform Commission (NDRC), China’s state planner, said this Tuesday that the downward pressure on China's economy is increasing. This offsets the recent optimism led by China's stimulus bonanza and turns out to be a key factor behind the latest leg of a sudden fall witnessed in the last hour. Apart from this, expectations for a jumbo interest rate cut by the Reserve Bank of New Zealand (RBNZ) contribute to the offered tone surrounding the NZD/USD pair. 

The US Dollar (USD), on the other hand, remains on the defensive below a seven-week top touched on Friday, though it lacks any meaningful selling amid diminishing odds for a more aggressive policy easing by the Federal Reserve (Fed). Furthermore, escalating geopolitical tensions in the Middle East might continue to offer support to the safe-haven buck and drive flows away from the risk-sensitive Kiwi, suggesting that the path of least resistance for the NZD/USD pair remains to the downside. 

• The NZD/USD declined by 0.60% to 0.6125, extending its recent downtrend.
• The RSI is in negative territory and declining, while the MACD histogram is red and rising.
• A break below 0.6100 could open the door for a further decline towards 0.6000.

In Monday's session, the NZD/USD pair extended its recent decline, falling by 0.60% to 0.6125. The pair has been in a downtrend lately, and today's losses extend that trend. The technical indicators are also bearish, suggesting that the selling pressure is likely to continue.

The Relative Strength Index (RSI) is currently at 40, which is in negative territory and declining sharply. This suggests that selling pressure is increasing and that the bears are in control of the market. The Moving Average Convergence Divergence (MACD) histogram is also red and rising, indicating a bearish outlook. As long as the RSI remains below 50 and the MACD histogram remains red, the technical outlook will remain bearish for the NZD/USD.

NZD/USD daily chart

The overall outlook for the NZD/USD is bearish as the pair lost its 20-day Simple Moving Average (SMA). On the bright side, the sellers encountered a barrier at the 100-day SMA at 0.6120 which can mitigate the losses in the near term. That being said, a break below this level could open the door for a further decline towards 0.6000.

• NZD/USD slides below 0.6150 as investors turn cautious ahead of RBNZ policy decision.
• Middle East tensions have kept the risk-aversion theme intact.
• NZD/USD trades below the 20- and 50-day EMAs.

The NZD/USD pair extends its losing spree for the fifth trading session on Monday. The Kiwi asset weakens on multiple tailwinds: weakens in the New Zealand Dollar (NZD) amid caution ahead of the Reserve Bank of New Zealand’s (RBNZ) monetary policy decision and a firm US Dollar (USD) due to waned Federal Reserve (Fed) large rate cut bets for November.

Market participants expect the RBNZ to cut its Official Cash Rate (OCR) for the second time on Wednesday. However, the rate cut size is expected to be 50 basis points (bps) against 25 bps. The RBNZ is expected to announce a hefty rate cut with the intention of uplifting economic growth. The Kiwi economy is going through a rough phase due to the poor demand environment in the domestic and global markets.

Meanwhile, an all-out war between Israel and Iran has also dampened the appeal of risk-sensitive assets. The S&P 500 opens on a bearish note. The US Dollar Index (DXY), which gauges Greenback’s value against six major currencies, clings to gains near the seven-week high of 102.60.

The expectations for the Fed another 50-bps rate cut in November have been wiped out after the United States (US) Nonfarm Payrolls (NFP) for September surprisingly came in highest at 254K since March. Going forward, investors will focus on the US Consumer Price Index (CPI) data for September, which will be published on Thursday.

NZD/USD faces a sharp sell-off after failing to recapture the yearly high of 0.6410. The Kiwi asset extends its downside below the 20-and 50-day Exponential Moving Averages (EMAs), which trade around 0.6230 and 0.6180, respectively.

The 14-day Relative Strength Index (RSI) declines toward 40.00, suggesting a weakening of momentum.

More downside would appear if the pair breaks below the horizontal support plotted from September 11 low around 0.6100. The asset would decline further towards May 3 high of 0.6046 and the psychological support of 0.6000 if it breaks below September 11 low.

On the flip side, a reversal move above the 20-day EMA at 0.6230 will drive the asset towards September 3 high of 0.6302 and September 30 high near 0.6380.

NZD/USD daily chart

Price action continues to suggest further New Zealand Dollar (NZD) weakness, albeit likely at a slower pace. The levels to watch are 0.6135 and 0.6105, UOB Group FX analysts Quek Ser Leang and Peter Chia note.  

NZD may fall towards 0.6135

24-HOUR VIEW: “While our expectation for NZD to ‘continue to weaken’ last Friday was correct, our view that it ‘is unlikely to break below the significant support at 0.6170’ was not. NZD easily broke below 0.6170, reaching a low of 0.6146. Conditions are severely oversold, and instead of continuing to weaken today, NZD is more likely to trade in a 0.6145/0.6205 range.”

1-3 WEEKS VIEW: “Last Wednesday (02 Oct, spot at 0.6285), we noted that ‘downward momentum has increased slightly.’ We held the view that ‘the pullback in NZD could potentially reach 0.6225.’ After NZD dropped below 0.6225, we indicated last Friday (04 Oct, spot at 0.6215) that, ‘momentum has increased further, and NZD could continue to decline to 0.6170.’ We added, ‘we will expect NZD to weaken as long as it remains below 0.6295 (‘strong resistance’ level).’ In NY trade, NZD fell below 0.6170, reaching a low of 0.6146. Although the price action continues to suggest further NZD weakness, oversold conditions suggest a slower pace of decline. The next levels to watch are 0.6135 and 0.6105. On the upside, the ‘strong resistance’ level has moved lower to 0.6220 from 0.6295.”

• NZD/USD trades on a softer note around 0.6165 in Monday’s Asian session. 
• Traders pull back expectations for a 50 bps cut from the Fed at its November meeting after the upbeat NFP data. 
• The RBNZ is expected to cut another OCR in its October meeting on Wednesday. 

The NZD/USD pair remains on the defensive near 0.6165 during the early Asian session on Monday. The firmer Greenback after the encouraging US employment data exerts some selling pressure on the pair. The Reserve Bank of New Zealand (RBNZ) interest decision will take center stage on Wednesday.

The recent US economic data indicated strength in labor conditions and will likely support the case for the US Federal Reserve's (Fed) rate cuts by 25 basis points (bps) in November and December. Traders are now pricing in around 97.4% possibility of 25 bps Fed rate cuts in September, up from 31.1% before the NFP data, according to the CME Fedwatch Tool. Lower bets of an aggressive Fed rate cut boost the US Dollar (USD) against the Kiwi. 

Chicago Fed President Austan Goolsbee emphasized on Friday that the September jobs report doesn't alter the view that interest rates can come down "a lot" over the next year and a half. Goolsbee further stated that the central bank will be careful not to keep rates as "restrictive as they are," even with inflation close to the 2% target and the labor market healthy.

The RBNZ started the easing cycle in August with a 25 basis points (bps) cut to 5.25%, and analysts expect the New Zealand central bank to cut further the Official Cash Rate (OCR) in its October meeting on Wednesday. “We now expect more aggressive rate cuts from the RBNZ with growth under pressure. We see two 50bps cuts in Q4-2024, taking the OCR to 4.25% (4.75% prior) by end-2024. We maintain our view for 125bps of cuts in 2025, and see the OCR at 3% by end-2025 (3.5% prior),” noted Standard Chartered analysts. 

The New Zealand Dollar (NZD) could continue to weaken; oversold conditions suggest any decline is unlikely to break below the significant support at 0.6170. Momentum has increased further; NZD could continue to decline to 0.6170, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann note.

NZD can continue to decline to 0.6170

24-HOUR VIEW: “Yesterday, we noted that ‘there has been a slight increase in momentum.’ We highlighted that ‘while NZD could break below 0.6250, the major support at 0.6225 is still unlikely to come into view.’ The anticipated weakness exceeded our expectations as NZD fell to a low of 0.6211. While NZD could continue to weaken, oversold conditions suggest any decline is unlikely to break below the significant support at 0.6170 (minor support is at 0.6200). Resistance is 0.6235; a breach of 0.6255 would suggest that NZD is not weakening further.”

1-3 WEEKS VIEW: “Two days ago (02 Oct, spot at 0.6285), we noted that ‘downward momentum has increased slightly.’ We held the view that ‘the pullback in NZD could potentially reach 0.6225.’ Yesterday, NZD dropped below 0.6225, reaching a low of 0.6211. Momentum has increased further, and NZD could continue to decline to 0.6170. We will expect NZD to weaken as long as it remains below 0.6295 (‘strong resistance’ previously at 0.6325.).”

• NZD/USD continues to lose ground as the RBNZ is widely expected to deliver a 50 basis point rate cut in October.
• HSBC and BNZ expect the RBNZ to lower its cash rate by 50 basis points next week.
• The US Dollar received support as recent US data faded the dovish sentiment surrounding the Fed’s policy outlook.

NZD/USD extends its losing streak, trading around 0.6200 during the early European hours on Friday. This downside of the pair could be attributed to dovish sentiment surrounding the Reserve Bank of New Zealand's (RBNZ) monetary policy stance next week. RBNZ is widely expected to deliver a 50 basis point interest rate cut amid concerns over weak economic growth and rising unemployment.

HSBC analysts expect the Reserve Bank of New Zealand (RBNZ) to lower its cash rate by 50 basis points in both October and November, revising their previous forecast of 25 basis point cuts for each month. Similarly, the Bank of New Zealand (BNZ) is also forecasting a 50 basis point cut from the RBNZ next week, citing disinflationary data as a key factor that could prompt the central bank to accelerate its easing measures.

The risk-sensitive NZD/USD pair could struggle due to safe-haven flows amid escalating Middle-East tensions. US President Joe Biden stated that the United States (US) is in discussions with Israel about potential strikes on Iran's Oil infrastructure. Israeli Prime Minister Benjamin Netanyahu warned that Iran "will pay a heavy price" for Tuesday’s attack, which involved the firing of at least 180 ballistic missiles at Israel, according to the BBC.

The US Dollar (USD) received support from better-than-expected US ISM Services PMI and ADP Employment Change data released this week. These reports have challenged dovish expectations for Federal Reserve (Fed) monetary policy.

Federal Reserve Bank of Chicago President Austan Goolsbee said on Thursday that the interest rates need to come down over the next year by “a lot.” Goolsbee further stated that he’d like to keep the unemployment rate at 4.2% and prevent it from rising any further.

• NZD/USD recovers to near 0.6215 in Friday’s early Asian session. 
• Reduced bets of Fed deeper rate cuts and the cautious mood might underpin the USD and cap NZD/USD’s upside.
• The RBNZ will likely cut its OCR by 50 bps next week. 

The NZD/USD pair edges higher to around 0.6215 on Friday during the early Asian trading hours. The cautious mood ahead of the key US employment data on Friday and the growing bets of the Reserve Bank of New Zealand (RBNZ) rate cut next week might cap the pair’s upside. 

Federal Reserve Bank of Chicago President Austan Goolsbee reiterated on Thursday that the interest rates need to come down over the next year by “a lot.” Goolsbee further stated that he’d like to keep the unemployment rate at 4.2% from rising any further. Meanwhile, Richmond Fed President Thomas Barkin said on Wednesday that a jumbo rate cut last month was an acknowledgement that its policy rate was "out of sync" with where the economy stands but shouldn't be taken as a sign that the battle with inflation is finished. 

Traders await the US employment data for fresh impetus. The US economy is expected to see 140K jobs added in September. While the Unemployment Rate is expected to remain unchanged at 4.2% in the same period. 

The rising geopolitical tensions in the Middle East and the uncertainty around the US elections might support the US Dollar in the near term. After carrying out further airstrikes in Lebanon's capital on Thursday, the Israeli military vows to continue attacking Hezbollah targets in Beirut and southern Lebanon. An attack in central Beirut killed nine people, marking the first time Israel has targeted the city since 2006, per CNN. 

The RBNZ is anticipated to reduce the Official Cash Rate (OCR) by 50 basis points to 4.75% next week, after a 25 bps cut in August. The swaps market implies a 75% chance of a 50 bps cut, while the vast majority of analysts surveyed by Bloomberg have a 50 bps cut pencilled in. The expectation that the RBNZ will continue cutting interest rates next week is likely to drag the Kiwi lower against the USD. 

• NZD/USD has rolled over and fallen to key support at around 0.6220. 
• It may have formed a bearish Japanese candlestick pattern and the MACD has crossed below its signal line. 

NZD/USD reaches a key resistance band at around the 0.6400 level and promptly reverses lower. It is in the process of forming three consecutive bearish days which in Japanese candlestick analysis is a bearish reversal sign called a “Three Black Crows” pattern (light blue shaded rectangle on chart below). If Thursday (today) ends as a long red candle it will confirm completion of such a pattern. 

NZD/USD Daily Chart 

The move down from the September 30 peak has been sharp and accompanied by equally bearish momentum, increasing the chances it could extend further. However, it has just met a formidable support level at around 0.6220 composed of multiple price peaks in the first half of 2024. This is likely to pose an obstacle to bears wishing to push prices lower.

The blue Moving Average Divergence Convergence (MACD) has crossed below its red signal line which is a bearish signal. 

There is a risk the market may be reversing and further downside could follow. This would particularly be the case if prices closed substantially below the 0.6220 support level, perhaps at 0.6200 or lower. 

However, such a move would soon meet further tough support from the cluster of major Simple Moving Averages (SMA) not far below, starting with the 50-day SMA at 0.6141, but followed by the 100 and 200-days at roughly 0.6120 and 0.6101 respectively. 

Further, it is also possible the Kiwi pair could rally from the current support level in the 0.6220s and resume its prior more-bullish trend. Yet any substantial upside progress is likely to be stymied by tough resistance at around 0.6400 from prior highs in July and December 2023.

• NZD/USD drifts lower for the third straight day amid a further USD recovery from the YTD low.
• Reduced bets for a 50 bps Fed rate cut in November and geopolitical risks boost the Greenback.
• Expectations that the RBNZ will start cutting rates next week favor bears ahead of the US data. 

The NZD/USD pair prolongs this week's retracement slide from the 0.6375-0.6380 region, or its highest level since July 2023 and remains under some selling pressure for the third successive day on Thursday. The downward trajectory drags spot prices below mid-0.6200s, or a one-and-half-week low during the Asian session and is sponsored by some follow-through US Dollar (USD) buying. 

In fact, the USD Index (DXY), which tracks the Greenback against a basket of currencies, prolongs this week's recovery from its lowest level since July 2023 for the third successive day and climbs to a three-week top. The incoming US data pointed to a still resilient labor market and forced investors to scale back their expectations for a more aggressive policy easing by the Federal Reserve (Fed). This, along with persistent geopolitical risks stemming from the ongoing conflicts in the Middle East, benefits the safe-haven buck and contributes to driving flows away from the risk-sensitive Kiwi. 

Iran launched over 200 ballistic missiles at Israel on Tuesday, while the latter conducted a precise air strike and bombed central Beirut in Lebanon during the early hours of Thursday. This raises the risk of a full-blown war in the region and tempers investors' appetite for perceived riskier currencies, including the New Zealand Dollar (NZD). Apart from this, expectations that the Reserve Bank of New Zealand (RBNZ) will start cutting interest rates next week suggest that the path of least resistance for the NZD/USD pair is to the downside and supports prospects for a further downfall. 

Market participants now look to the US economic docket – featuring the release of the usual Weekly Initial Jobless Claims and the ISM Services PMI. This, along with speeches by influential FOMC members and the broader risk sentiment, will drive the USD demand and provide a fresh impetus to the NZD/USD pair later during the North American session. The focus, however, remains glued to the closely-watched US monthly employment details, popularly known as the Nonfarm Payrolls (NFP) report on Friday, which should help in determining the next leg of a directional move.

• NZD/USD trades in negative territory for the third consecutive day around 0.6260 in Thursday’s early Asian session. 
• The US private sector added more jobs than expected in September.
• The RBNZ is anticipated to cut more rates next week. 

The NZD/USD pair attracts some sellers to near 0.6260 during the early Asian session on Thursday. The stronger US Dollar (USD) and rising US yields weigh on the pair. 

The Greenback edges higher after the encouraging report on Wednesday. Private sector employment in the US climbed 143,000 in September and above the estimated 120,000 jobs, the Automatic Data Processing (ADP) reported on Wednesday. This report indicated the labor market is holding its ground despite some signs of weakness. 

Richmond Fed President Thomas Barkin said on Wednesday that the Fed's fight to return inflation to its 2% target may take longer than expected to complete and limit how far interest rates can be cut, per Reuters. Interest rate futures contracts have priced in a nearly 35.6% chance of a half-point cut in November, versus a 64.4% possibility of a quarter-point cut, according to the CME FedWatch Tool.

Market players will monitor the US September ISM Services Purchasing Managers Index (PMI) on Thursday, which is expected to improve to 51.7 in September from 51.5 in August. Additionally, the weekly Initial Jobless Claims and the final S&P Global Services PMI will be published. 

The New Zealand Dollar (NZD) remains under selling pressure amid rising bets of a more aggressive rate reduction from the Reserve Bank of New Zealand (RBNZ) at its upcoming next week, with an 87% odds of a 50-basis points (bps) rate cut being priced in. 

The New Zealand (NZD) could continue to weaken; oversold conditions suggest a sustained break below 0.6250 is unlikely. In the longer run, downward momentum has increased slightly; pullback in NZD could potentially reach 0.6225, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann note.

NZD can fall to 0.6225 in the longer run

24-HOUR VIEW: “Our view of sideways trading yesterday was incorrect, as NZD fell sharply to 0.6265 before closing on a weak note at 0.6281 (-1.13%). Unsurprisingly, the sharp drop has resulted in an increase in momentum. Today, while NZD could continue to weaken, oversold conditions suggest a sustained break below 0.6250 is unlikely. The major support at 0.6225 is also unlikely to come into view. To keep the oversold momentum going, NZD must not break above 0.6325 with minor resistance at 0.6305.”

1-3 WEEKS VIEW: “We have expected a higher NZD since late last week (as annotated in the chart below). After NZD rose to 0.6379, we highlighted yesterday (01 Oct, spot at 0.6345) that “there has been no further increase in momentum, and it remains unclear if NZD could rise further to 0.6410.” We also highlighted that “only a breach of 0.6280 (‘strong support’ level) would mean that 0.6410 is not coming into view.” NZD then fell sharply, breaking below 0.6280 (low of 0.6265). Not only upward momentum has faded, but downward momentum has also increased, albeit not much. At this time, we view the current price movements as a pullback that could potentially reach the significant support at 0.6225. We will hold the same view provided that 0.6350 (‘strong resistance’ level) is not breached.”

• NZD/USD may lose ground due to risk-off mood amid rising Middle-East tensions.
• The US Dollar gains ground due to the waning likelihood of a bumper Fed rate cut in November.
• The New Zealand Dollar may struggle as the RBNZ is expected to deliver a 50 basis point cut next week.

NZD/USD pares daily gains but holds some gains, trading around 0.6290 during the early European hours on Wednesday. The upside of the risk-sensitive Kiwi pair could be restrained due to rising risk aversion sentiment amid escalating geopolitical tensions in the Middle East.

Iran launched over 200 ballistic missiles at Israel, prompting Prime Minister Benjamin Netanyahu to vow retaliation against Tehran for the Tuesday attack. In response, Iran warned that any counterstrike would lead to "vast destruction," heightening concerns of a broader conflict, per Bloomberg.

Earlier this week, Federal Reserve (Fed) Chairman Jerome Powell. Powell said that the central bank will lower its interest rate gradually over time. The US Dollar receives support from the waning likelihood of an aggressive rate cut by the Fed in November.

The CME FedWatch Tool indicates that markets are assigning a 62.7% probability to a 25 basis point rate cut by the Federal Reserve in November, while the likelihood of a 50-basis-point cut is 37.3%, down from 57.4% a week ago.

The Reserve Bank of New Zealand's (RBNZ) monetary policy meeting is set for next week, and markets have already priced in a strong likelihood of a 50 basis point interest rate cut. HSBC analysts now expect the RBNZ to lower its cash rate by 50 basis points in both October and November, revising their earlier forecast of 25 basis point cuts for each month.

The Bank of New Zealand (BNZ) is also predicting a 50 basis point cut from the RBNZ next week. "In our view, the disinflationary data we've received will be a key factor, prompting the RBNZ to accelerate its easing process," they stated.

• NZD/USD edges higher to around 0.6285 in Wednesday’s early Asian session. 
• The US ISM Manufacturing PMI came in worse than expected in September. 
• The RBNZ is expected to cut its cash rate by 50 basis points.

The NZD/USD pair gathers strength near 0.6285 despite the firmer US Dollar (USD). Nonetheless, the cautious mood in the market amid the escalating tension in the Middle East could lift the Greenback. Investors will keep an eye on the US ADP Employment Change and Fedspeak. 

The weaker-than-expected US economic data caps the Greenback’s upside. The ISM Manufacturing PMI for September remained steady at 47.2 in September, unchanged from the previous reading, but missing estimates of 47.5. This figure was below the 50% threshold for the sixth consecutive month.

Iran launched over 200 ballistic missiles at Israel and Prime Minister Benjamin Netanyahu vows to retaliate against Iran for the missile attack on Tuesday, but Tehran warned that any response would result in "vast destruction, fuelling fears of a wider war. The rising geopolitical risks could support the US dollar (USD), a safe-haven currency. 

On the Kiwi front, HSBC analysts expect more aggressive interest rate cuts from the Reserve Bank of New Zealand (RBNZ),in the upcoming months due to signs of a slowing economy. The bank anticipate the RBNZ to lower its cash rate by 50 basis points (bps) in both October and November, a change from its previous prediction of 25bp cuts in each of the two months. This, in turn, might cap the upside for the Kiwi in the near term. 

• NZD/USD falls sharply to near 0.6300 with a focus on US ISM Manufacturing PMI and the JOLTS Job Openings data.
• The US Dollar refreshes weekly high ahead of a slew of US data.
• China’s massive stimulus announcement has kept strength in the Kiwi dollar intact.

The NZD/USD pair tumbles to near the crucial support of 0.6300 in Tuesday’s New York session after facing selling pressure above the key resistance of 0.6350. The Kiwi asset weakens as the US Dollar (USD) posts a fresh weekly high, with investors turning cautious ahead of a slew of United States (US) economic data.

Investors will pay close attention to the US data as it will influence market expectations for the Federal Reserve (Fed) interest rate outlook. In today’s session, investors will focus on the US ISM Manufacturing PMI for September and the JOLTS Job Openings data for August, which will be published at 14:00 GMT.

The ISM Manufacturing PMI is estimated to have improved slightly to 47.5 from 47.2 in August. Still, the measure would suggest that activity in the factory sector continued to sink. Meanwhile, the Job Openings are expected to have grown at a steady pace, as seen in July, to 7.67 million.

Later this week, the US ADP Employment Change, ISM Services PMI, and the Nonfarm Payrolls (NFP) data for September will be under the spotlight.

In the Asia-Pacific region, the outlook of the New Zealand Dollar (NZD) is still upbeat on China’s massive stimulus for the economic revival. It is worth noting that New Zealand is one of the leading trading partners of China.

NZD/USD witnesses a sharp decline after failing to sustain above the crucial resistance of 0.6350. However, the near-term outlook of the Kiwi asset is still upbeat as the 20-day Exponential Moving Average (EMA) near 0.6250 is sloping higher.

The 14-day Relative Strength Index (RSI) slips into the 40.00-60.00 range, suggesting a weakening of momentum.

A fresh upside could appear if the asset breaks above the December 2023 high of 0.6400, which will drive the major toward the August 2022 high of 0.6470, followed by the psychological resistance of 0.6500.

In an alternate scenario, the asset could decline to near the 20-day EMA around 0.6250 if sustains below 0.6300. A downside move below the former will expose it to near the round-level support of 0.6200.

NZD/USD daily chart