NZD/USD Price Forecast: Searches for direction as YTD low at 0.5567 comes into view

• A recovery from the 0.5584 lows leaves NZD/USD confined to the lower end of the 0.5600s.
• With the RBNZ keeping interest rates unchanged, the Kiwi is finding it difficult to shake off the resulting selling pressure.
• A dovish tilt from the Fed lent the Kiwi some support in early Asian trading.

Following Wednesday’s fall of nearly 1%, the New Zealand Dollar (NZD) is surrendering earlier gains against the US Dollar (USD) on Thursday. It has turned negative on the daily chart, leaving the immediate downtrend in place. At the start of the European session, NZD/USD trades at 0.5615, having seen its recovery from the 0.5584 lows stall around 0.5635 during Asian trading.

The Reserve Bank of New Zealand (RBNZ) kept interest rates on hold on Wednesday, wrong-footing investors who had anticipated a 25-basis-point increase and prompting a sharp fall in the Kiwi. Although Governor Anna Breman signalled further rate rises in December, the NZD remained under pressure.

The US Federal Reserve (Fed) likewise left rates unchanged later on Wednesday. Remarks from Chairman Kevin Warsh were interpreted as having a dovish bias, curbing the US Dollar’s advance and lending the pair some support.

While signalling further monetary tightening, Warsh declined to specify when it might come. His assertions that “monetary medicine is starting to work” and that the central bank might return inflation to target without needing to “throw people out of work” also suggest that the terminal interest rate could be below expectations.

Technical Analysis: Bears retain control as the 0.5567 low draws near

With buyers unable to establish a foothold above 0.5635 earlier in the day, NZD/USD retains a near-term bearish bias at 0.5619. A retreat in the Relative Strength Index (14) towards the low-30s, alongside a Moving Average Convergence Divergence (MACD) reading still below zero, suggests that downward pressure persists.

The intraday peak of 0.5637 provides the first resistance. Above it lies the 0.5700 area, which checked advances on October 21, 25 and 27, followed by the September 22 high around 0.5750.

For sellers, Wednesday’s trough at 0.5584 is likely to provide the first test before the previously noted 18-month low of 0.5567, reached earlier in October. Below that, a plausible target appears to be the 127.2% Fibonacci retracement of the June-August rally, around 0.5530.

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