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NZD/USD Price Forecast: Holds gains above 0.5850, but stays constrained under 100-day SMA

  • NZD/USD posts modest gains near 0.5865 in Friday’s early European session. 
  • The pair maintains a negative outlook under the 100-day SMA, with bearish RSI momentum. 
  • The first upside barrier emerges at 0.5895; the initial support level is located at 0.5834.

The NZD/USD pair trades with mild gains around 0.5865 during the early European session on Friday, bolstered by hawkish signals from the Reserve Bank of New Zealand (RBNZ). All eyes will be on the US Nonfarm Payrolls data for May, which is due later on Friday. 

RBNZ Governor Anna Breman said last week that the Official Cash Rate (OCR) is likely to increase sooner and by more than previously signalled, citing Middle East conflict-driven inflation, weaker growth and rising input costs across New Zealand and its trading partners. Markets have repriced the New Zealand rate outlook, with traders now expecting multiple hikes through early 2027.

Analysts expected the US economy to show 85,000 jobs added in May, while the Unemployment Rate is forecast to stay unchanged at 4.3%. In case of a stronger-than-expected outcome, this could lift the US Dollar (USD) and act as a headwind for the pair. 

Chart Analysis NZD/USD

Technical Analysis:

In the daily chart, NZD/USD holds a modest bearish bias as it remains capped beneath the 100-day Simple Moving Average (SMA) and the Bollinger middle band, highlighting persistent overhead supply after recent failures to sustain gains. The Relative Strength Index (14) hovers just below the 50 line around 47, hinting at fading upside momentum rather than an outright oversold condition.

On the topside, initial resistance is located at the Bollinger middle band around 0.5895, followed closely by the 100-day SMA at 0.5900; a daily close above this cluster would be needed to ease the immediate bearish pressure and expose the upper Bollinger band near 0.5983. On the downside, the May 27 low of 0.5834 act as an initial support level. The next contention level to watch is the Bollinger lower band around 0.5805, and a break beneath this floor would likely open the way to a deeper pullback in the kiwi against the US dollar.

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

New Zealand Dollar FAQs

The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.

The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.

Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.

The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.

Author

Lallalit Srijandorn

Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.

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