NZD/USD Price Forecast: Can the pair find direction with the YTD low at 0.5567 in sight?

• NZD/USD remains restricted to the lower 0.5600s despite recovering from lows of 0.5584.
• Selling pressure continues to weigh on the Kiwi after the RBNZ opted to keep interest rates unchanged.
• Early Asian trading brought the Kiwi some relief as the Fed adopted a dovish tilt.

Bearish pressure persists on the New Zealand Dollar (NZD) against the US Dollar (USD) on Thursday, with earlier gains reversing and the daily chart turning negative. The immediate downtrend remains intact following Wednesday’s decline of nearly 1%. At the start of the European session, NZD/USD is trading at 0.5615, after its recovery from lows of 0.5584 stalled around 0.5635 in Asian trading.

Investors had anticipated a 25-basis-points hike, but the Reserve Bank of New Zealand (RBNZ) kept interest rates steady on Wednesday, triggering a sharp fall in the Kiwi. Even as Governor Anna Breman signalled further rate increases in December, the NZD stayed under pressure.

Some support emerged for the pair later on Wednesday when the US Federal Reserve (Fed) also left rates unchanged. Comments from Chairman Kevin Warsh were interpreted as dovish, limiting the US Dollar’s rally.

Although Warsh signalled more monetary tightening ahead, he declined to specify when it might take place. His remarks that “monetary medicine is starting to work” and that the central bank might return inflation to target without having to “throw people out of work” also suggest that the terminal interest rate might fall short of expectations.

Technical Analysis: Can bears extend control as the 0.5567 low draws near?

A failure by bulls to establish a foothold above 0.5635 earlier in the day leaves NZD/USD with a bearish near-term outlook as it trades at 0.5619. Downside pressure continues to be signalled by the Relative Strength Index (14), which has slipped towards the low-30s, and the Moving Average Convergence Divergence (MACD), which remains below zero.

The intraday peak of 0.5637 presents the first resistance hurdle. Beyond it lies the 0.5700 zone, which checked advances on 21, 25 and 27 October, followed by the 22 September high near 0.5750.

For bears, Wednesday’s low of 0.5584 is likely to pose the first challenge before the previously mentioned 18-month trough 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, near 0.5530.

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