Insights 
VT 
The NZDUSD pair has seen a rally due to dovish comments from the Federal Reserve and a softer-than-expected Non-Farm Payroll (NFP) report. The Federal Reserve’s Kashkari aligned with other members for a potential rate cut in September, with the market now pricing 60 basis points (bps) of easing by year-end, in contrast to 35 bps before the NFP release. If upcoming data remains benign, Fed Chair Powell may signal an interest rate cut at the Jackson Hole Symposium.
The ISM Services PMI revealed a new high in the prices index, and the US Jobless Claims figures could offer further insight into the labour market. Strong data might lead to a reassessment of the market expectations, while weak figures would reinforce the current outlook, impacting the USD.
New Zealand Economic Outlook
On the New Zealand side, the labour market report met expectations, maintaining the Reserve Bank of New Zealand’s (RBNZ) projected easing of around 40 bps by year-end, with an 87% probability of a cut at the upcoming meeting.
Technical analysis of the NZDUSD shows it bounced from the 0.5850 support zone on the daily chart, targeting the 0.6020 level. On the 4-hour and 1-hour charts, upward trendlines support bullish momentum, while sellers may seek downside breakthroughs. Upcoming US Jobless Claims figures are awaited for further impact.
We are seeing the US dollar weaken after Federal Reserve officials hinted at rate cuts. This followed last week’s softer jobs report, which changed market expectations about the economy. The Non-Farm Payrolls report from August 1st, 2025, showed a gain of just 155,000 jobs, missing expectations and prompting traders to bet on Fed easing.
As a result, all eyes are now on the Jackson Hole Symposium later this month for clearer signals from Fed Chair Powell. The market is now pricing in a nearly 90% chance of a rate cut in September, a significant shift from just a few weeks ago. However, we must remember that the latest Core PCE inflation reading for June 2025 came in at a still-sticky 2.9%, making this decision less straightforward.
Potential Rate Cuts
On the other side of the trade, we are also expecting the Reserve Bank of New Zealand to cut rates. New Zealand’s own Q2 2025 inflation data showed a dip to 3.1%, giving the RBNZ a clear reason to ease policy at their meeting next week. This could limit how high the NZDUSD can actually go, as both currencies may be weakening at the same time.
From a trading perspective, the bounce from the 0.5850 support level is significant. We are looking at any dips towards the upward trendline, currently around 0.5940, as potential opportunities to enter long positions. The primary target for this bullish move is the major downward trendline resistance near the 0.6020 level.
Alternatively, traders should consider that the 0.6020 resistance level has been a significant barrier since early 2024. We see this as a strong area to initiate bearish positions, like buying put options, with a defined risk set just above that trendline. A rejection from here would put the key 0.5850 support level back in focus.
The US Jobless Claims data later today is the next immediate catalyst for volatility. Looking back at the past year, we have seen claims numbers consistently surprise the market, causing sharp, short-term moves. A surprisingly low number today could challenge the weak labor market story and trigger a rapid pullback in the pair.
