NZD\/USD rebounded above 0.5700 on Friday but the technical bias stayed bearish. The pair was up over 0.22% after touching an intraday low of 0.5689, and it was last trading at 0.5709. The Relative Strength Index is edging higher yet remains below 50, indicating improving momentum without a shift in overall direction. Rate probabilities were cited as implying the Reserve Bank of New Zealand could raise rates at least twice, though the near-term focus is a former support line now acting as resistance around 0.5750.<\/p>\n
A break above 0.5750 would put 0.5800 in view, with further resistance at the 200-day Simple Moving Average at 0.5821, then the 50-day SMA at 0.5831 and the 100-day SMA at 0.5851. If those levels give way, attention turns to 0.5900. On the downside, a drop below the day\u2019s low at 0.5689 would open 0.5650, followed by 0.5600. Separately, the RBNZ\u2019s inflation objective was described as 1% to 3% over the medium term, centred near 2%.<\/p>\n
We see the Kiwi dollar attempting a small recovery above the 0.5700 mark, but the broader trend remains firmly bearish. The strong US jobs report released just before the holiday, which showed the US economy added 265,000 jobs in June 2026, continues to support a strong Greenback. This fundamental strength from the US will likely cap any significant NZD\/USD rallies in the short term.<\/p>\n
The 0.5750 level is the key resistance that we expect will hold firm in the coming days. We view this current rebound as a selling opportunity, as the Relative Strength Index (RSI) remains below the 50 midline, indicating underlying weakness. Derivative traders might consider buying put options with strike prices below 0.5700, targeting a move back towards recent lows.<\/p>\n
Domestically, while New Zealand’s Q2 2026 inflation data came in slightly hot at 3.1%, this has not been enough to overcome the US dollar’s momentum. The market has already priced in the Reserve Bank of New Zealand’s hawkish stance, with two more rate hikes anticipated before the year’s end. This local factor is providing a floor for the currency but is not strong enough to fuel a reversal.<\/p>\n
External pressures are also mounting against the Kiwi. The latest Caixin Manufacturing PMI data from China, New Zealand’s largest trading partner, fell to 49.7, signaling a contraction and weakening demand for exports. This was worsened by the most recent Global Dairy Trade auction, where prices slid by 2.1%, marking the third decline in a row.<\/p>\n
Should the pair break below the recent low of 0.5689, we see a clear path to test the 0.5650 support level. Given the combination of a strong US dollar and weak external demand, a test of the 0.5600 figure seems increasingly probable within the next few weeks. We are positioning for this continued downward trend.<\/p>\n\n\n\n