NZD/USD Price Analysis: 100-SMA near 0.5650 on H4 proves difficult to break above

• A softer USD supports further buying in NZD/USD, but conviction behind the advance remains limited.
• With Friday’s US NFP report in focus, the RBNZ’s dovish decision to leave rates unchanged last week restrains the NZD.
• Conflicting technical signals also suggest caution is warranted before taking positions for additional gains.

Around 0.5655-0.5660, NZD/USD reaches its highest level in more than a week during Thursday’s early European session as broad US Dollar (USD) weakness supports the pair. The advance marks a second consecutive day of gains, extending the previous day’s rebound from the 0.5575 area, a three-week low.

Against the backdrop of the post-election fallout, the USD Index (DXY), which measures the Greenback against a basket of currencies, falls to its lowest level since late September. The Democratic sweep in the US midterm elections has prompted concerns over fiscal gridlock that could constrain government spending and slow economic growth. At the same time, expectations of an end to the Iran war are weighing on crude oil prices. The resulting easing of inflation concerns is putting US bond yields under pressure, further weakening the dollar and providing some support for NZD/USD.

Last week’s unexpectedly dovish decision by the Reserve Bank of New Zealand (RBN) to keep the Official Cash Rate (OCR) at 2.75% could, however, make it difficult for the New Zealand Dollar (NZD) to draw substantial additional buying. With the crucial US monthly employment figures due on Friday, traders may also hold back from sizeable directional positions. Known as the US Nonfarm Payrolls (NFP) report, the release will be an important driver of demand for the USD and, in turn, NZD/USD.

On the 4-hour chart, the breakdown following the RBNZ decision and the subsequent failure near the 100-period Simple Moving Average (SMA) leave the pair with a negative short-term technical bias. Having retreated from recently overbought levels to around 55, the Relative Strength Index (14) points to a moderation in bullish momentum. Although the Moving Average Convergence Divergence (MACD) histogram remains slightly positive, its flat profile signals waning upward pressure rather than a strong trend.

Before positioning for a continuation of the established decline from August’s monthly swing high, it would therefore be prudent to await a sustained break below the 0.5580-0.5570 horizontal support area and acceptance beneath it. For any advance, the first resistance comes from the 100-period SMA near 0.5649, ahead of the 23.6% Fibonacci retracement at 0.5664. Only a sustained move above these hurdles would open the way to a test of the higher Fibonacci resistance levels at 0.5725 (38.2%) and 0.5775 (50%).

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

NZD/USD retains a negative bias on the 4-hour chart