New Zealand Dollar holds after weak US durable goods data

NZD/USD trades near the 0.5790 area on Monday, struggling to extend its recovery despite modest weakness in the US Dollar (USD). The New Zealand Dollar (NZD) receives some support from the sharp decline in oil prices, as lower energy costs improve the outlook for New Zealand, which relies heavily on imported fuel.

United States (US) Durable Goods Orders increased just 0.3% MoM in June, well below the 1.6% market forecast, following a revised 4.0% decline in May. However, orders excluding transportation rose 0.6%, while orders excluding defense increased 0.3%, indicating that underlying business demand remained relatively resilient.

The softer headline reading limited demand for the Greenback, although its impact on NZD/USD remained modest as investors avoided large positions ahead of the Federal Reserve’s monetary-policy decision.

On Tuesday, attention will turn to the US ADP Employment Change four-week average, which previously stood at 16.5K. A further decline could reinforce concerns that employment growth is losing momentum and place pressure on the US Dollar.

The US Housing Price Index is expected to rise 0.2% MoM in May after falling 0.1% previously. July Consumer Confidence will also be released, providing further insight into household sentiment before Wednesday’s Fed decision.

Short-term technical analysis:

On the 4-hour chart, NZD/USD trades at 0.5779, holding a bearish near-term bias as it remains capped beneath the short- and medium-term moving averages. The 20-period Simple Moving Average (SMA) at 0.5790 and the 100-period SMA at 0.5782 both sit just overhead as immediate dynamic resistance, aligning with nearby horizontal caps at 0.5786 and 0.5794. The Relative Strength Index (RSI) around 39 stays below the neutral 50 line, which suggests downside momentum is still dominant despite some stabilization after recent losses.

On the topside, initial resistance is clustered between the 100-period SMA at 0.5782 and the 20-period SMA at 0.5790, reinforced by horizontal barriers at 0.5786 and 0.5794, with a stronger ceiling at 0.5800. A sustained break above this area would expose higher resistances at 0.5907, 0.5930 and 0.5965. On the downside, immediate support is located at the horizontal level of 0.5771; a clear violation of this floor would reopen the decline and leave the pair vulnerable to further weakness in line with the prevailing bearish structure.

(The technical analysis of this story was written with the help of an AI tool. Know more.)