NZD/USD rebounds as USD weakens after Iran tensions escalate

NZD/USD surged and is now trading near the 0.5750 price region, starting the Asian session with a bullish bias on Wednesday.

The Greenback lost momentum after Iran’s Islamic Revolutionary Guard Corps (IRGC) warned it could target United States (US) companies operating in the region as retaliation for recent attacks. The threat, which included major firms such as Microsoft, Apple, Google, Intel, and Boeing, triggered a shift in market sentiment and weighed on the US Dollar (USD) despite its typical safe-haven appeal.

The move allowed the New Zealand Dollar (NZD) to gain ground, even as the broader risk environment remains fragile. Investors appear to be trimming USD exposure while monitoring the potential economic fallout of further escalation.

US President Donald Trump told aides he is willing to end the war against Iran even if the Strait of Hormuz remains largely closed.

Short-term technical analysis:

In the 4-hour chart, NZD/USD trades at 0.5744. The near-term bias is mildly bearish as the pair holds below both the 20-period and 100-period Simple Moving Averages (SMAs), which are edging lower and cap recovery attempts. The short-term SMA tracks well under the longer one, reinforcing selling pressure after the recent bounce from sub-0.5710 levels. The Relative Strength Index (RSI) stabilizes around 47 after recovering from oversold territory, indicating fading downside momentum but not yet signalling a clear bullish reversal.

Immediate resistance emerges at 0.5750, just above the market, with a sustained break opening the way toward 0.5907 and then 0.5930. On the downside, initial support is seen at 0.5741, followed by the 0.5706 level, ahead of more important backing at 0.5698. A clear drop below 0.5698 would restore stronger bearish pressure toward fresh lows, while holding above 0.5741 and reclaiming 0.5750 would be needed to ease the downside bias and encourage a deeper correction higher.

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