NZD/USD rises as ceasefire hopes weigh on US Dollar ahead of RBNZ decision

The NZD/USD pair trades with a bullish tone near the 0.5710 region on Tuesday, as the US Dollar (USD) softens amid improving risk sentiment driven by ceasefire hopes in the Middle East.

The Greenback is losing momentum as markets shift away from safe-haven positioning. Despite strong rhetoric from Donald Trump regarding the Strait of Hormuz, investors are focusing more on emerging diplomatic efforts and the possibility of de-escalation, which is supporting risk-sensitive currencies like the New Zealand Dollar (NZD).

Additionally, a modest pullback in US yields, along with softer-than-expected ISM Services data—particularly a decline in employment—has put pressure on the USD. While inflation components, such as Prices Paid, remain elevated, markets are increasingly concerned that growth may be slowing, which complicates the Federal Reserve's (Fed) outlook.

On the New Zealand side, the NZD is finding support ahead of the Reserve Bank of New Zealand's (RBNZ) policy decision later this week. Markets widely expect the central bank to maintain current interest rates, but any shift in tone or guidance could impact the Kiwi's next move. Traders are also keeping an eye on global risk appetite, considering New Zealand's sensitivity to external demand.

Short-term technical analysis:

On the 4-hour chart, NZD/USD trades at 0.5713. The near-term bias is mildly bearish as the pair holds below the falling 20-period and 100-period Simple Moving Averages (SMAs), which cap the upside near 0.5715 and 0.5785 respectively. The declining structure of both averages suggests sellers retain control after a persistent grind lower from the 0.58 area. RSI at 46 stays below the 50 midline, aligning with subdued bullish momentum rather than an oversold condition and reinforcing the current downside skew.

Immediate resistance emerges at 0.5721, followed by 0.5730, where short-term supply converges with the nearby 20-period SMA and could attract fresh selling on intraday rebounds. A sustained break above 0.5730 would open the way to the 0.5800 barrier,. On the downside, initial support is seen at 0.5712, with a break exposing 0.5706; a clear move below this band would confirm renewed bearish pressure and risk an extension of the broader decline.

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