Insights 
VT 
NZD/USD is approaching resistance near 0.5800 amidst stronger New Zealand economic data. The ANZ business outlook survey reveals increased business confidence, reaching an eight-month high of 58.1 from September’s 49.6. Expected own activity rose to a six-month high of 44.6%. Despite this, the Reserve Bank of New Zealand (RBNZ) is expected to ease its policy next month.
The RBNZ is projected to cut interest rates by 25 basis points to 2.25% on November 26. The odds of this rate cut are currently at 90% due to underlying inflation aligning with the RBNZ’s target range. Global economic activity, however, may mitigate the potential impact of these policy changes on NZD. The next RBNZ policy announcement will further confirm these expectations.
Key Resistance at 0.5800 Level
We see the NZD/USD pushing up against the key 0.5800 resistance level, supported by some positive domestic business outlooks. However, the market’s focus remains on the Reserve Bank of New Zealand’s expected interest rate cut next month. With a 90% probability of a cut priced in for November 26, this rally appears to be a good opportunity to position for a downturn.
The argument for a weaker Kiwi is reinforced by the latest Q3 2025 inflation data, which at 2.1% gives the RBNZ ample reason to ease policy. This contrasts with the situation in the United States, where recent strong payroll figures support the Federal Reserve’s commitment to maintaining its current rate. This growing policy divergence between the two central banks typically puts downward pressure on the NZD/USD pair.
For derivative traders, this creates a clear setup for bearish strategies leading into the RBNZ meeting. Selling call options with a strike price at or just above 0.5800 is a viable strategy to bet on this resistance level holding firm. Alternatively, buying put options would allow one to profit from a decline if the pair breaks lower following the confirmation of the rate cut.
Historical Context and Future Outlook
We only have to look back to the RBNZ’s easing cycle in 2019 to see how a dovish policy shift can lead to a sustained period of weakness for the currency. The 0.5800 level itself also acted as a significant technical barrier during the market volatility of late 2023, often stopping rallies in their tracks. This history suggests the current strength may be temporary.
Still, we should not ignore the support coming from signs of resilient global economic activity, which is helping to offset the drag from RBNZ expectations. Recent manufacturing PMI data from China, New Zealand’s largest trading partner, showed a surprise expansion. This is likely the cause of the Kiwi’s current firmness and what is providing these better entry levels for bearish positions.
