NZD/USD trades close to the 0.5760s, extending a run of losses that has dragged it toward the lower end of its recent range. A broadly firmer US Dollar (USD) is behind the slide, with the greenback supported by climbing United States (US) yields and rate-hike expectations.
Markets are expecting the Federal Reserve (Fed) to raise rates on Wednesday, with investors leaning toward a 25 basis points (bps) hike to 3.75%-4.00%, and the risk-off tone has weighed on growth-sensitive currencies like the New Zealand Dollar (NZD). On another note, the 10-year US Treasury yield has climbed to its highest level since 2007, topping 5%, as a more than 3% jump in oil revived inflation worries.
New Zealands Q2 Gross Domestic Product is due late on Wednesday, with growth expected to slow sharply to 0.1% on the quarter from 0.8%.
Short-term technical analysis:
On the 4-hour chart, NZD/USD trades at 0.5757. The pair remains under clear downside pressure as it trades below both the 20-period and 100-period Simple Moving Averages (SMAs), which now cap the upside around 0.5787 and 0.5877 respectively. The Relative Strength Index (RSI) hovers near 30, hinting at stretched but persistent bearish momentum rather than a confirmed reversal.
On the topside, initial resistance is seen at the 20-period SMA near 0.5787, followed by the 100-period SMA at 0.5877. Above there, horizontal barriers emerge at 0.5907, 0.5930 and 0.5965, forming a dense supply zone that would need to be reclaimed to ease the broader bearish tone. No nearby structural supports are defined by the current indicator set, leaving the pair vulnerable to further declines unless buyers step in to establish a new floor below the market.