Insights 
VT 
The New Zealand Dollar (NZD) is expected to test the 0.5710 mark but is unlikely to reach the major support at 0.5690 due to oversold conditions. Analysts at UOB Group suggest the longer-term outlook for NZD has turned negative, with a key level to monitor at 0.5690.
In the short-term, after a fall to 0.5717, further declines are anticipated, although not reaching the 0.5690 support. Current resistance levels are at 0.5735 and 0.5760. Looking forward one to three weeks, the outlook remains negative since 8th October, with strong resistance at 0.5780. If breached, the next level below 0.5690 is 0.5660.
Market Insights
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We see the outlook for the NZD has shifted to negative, suggesting a move towards 0.5690. For derivative traders, this could mean buying put options with strike prices around 0.5700 or lower. These positions would become profitable if the currency pair continues its decline in the coming weeks.
This negative view is supported by recent data showing New Zealand’s inflation cooled to 2.8% in the third quarter of 2025, reducing pressure on the RBNZ to raise rates. Meanwhile, a strong US jobs report from September 2025 continues to support the US dollar. The recent 3.2% drop in global dairy prices on October 7th also adds significant weight to the bearish case for the kiwi.
Economic Strength and Currency Outlook
While downward momentum is strong, we should be cautious of the current oversold conditions, which could cause a brief rebound. It may be wise to wait for a small rally towards the 0.5760 resistance level to initiate new short positions. Our negative view remains valid as long as the price stays below the critical resistance of 0.5780, which serves as a clear level for stop-loss orders.
This pattern reminds us of the third quarter of 2023, when a similar divergence in economic strength and central bank policy sent the pair sharply lower. If the key support at 0.5690 is broken, we will be watching for a further decline towards the next target at 0.5660. The continued strength in the US dollar remains the dominant theme driving this pair down.
