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NZD/USD Gains on Hawkish RBNZ Cut, USD Faces Headwinds Ahead of Key US Data
Traders' Opinions
Summary:
The New Zealand Dollar advanced against the US Dollar on Wednesday, driven by a hawkish rate cut from the Reserve Bank of New Zealand and growing expectations of a Fed rate cut in December.
Buy
TradingNZDUSD
EXP
0.56800
Entry Price
0.57900
TP
0.55900
SL
0.57150 -0.00134 -0.23%
0
Point
Flat
0.55900
SL
CLOSING
0.56800
Entry Price
0.57900
TP
The New Zealand Dollar (NZD) strengthened against its US counterpart on Wednesday, as the Reserve Bank of New Zealand (RBNZ) implemented a “hawkish cut” to its official cash rate (OCR) and markets speculated further easing from the US Federal Reserve later this year. The NZD/USD pair rose sharply following the RBNZ announcement, touching a session high near 0.5690 before retracing to sub-0.5670 levels amid profit-taking in European trading.
The RBNZ lowered its OCR by 25 basis points to 2.25%, marking the lowest level in three years. While the cut aligned with market expectations, the central bank’s accompanying statement emphasized that the easing cycle may be nearing its end, citing improving economic conditions in New Zealand. “Further OCR adjustments will be contingent on medium-term inflation trajectories and the broader economic outlook,” the bank noted. Looking ahead, the RBNZ projected the cash rate to average 2.20% in the first quarter of 2026 and to reach 2.65% by the end of 2027, suggesting a measured return to normalization over the medium term.
The announcement provided a significant boost to the Kiwi, which rallied across the board against major currencies. At its peak, NZD/USD gained as much as 1.4% before consolidating. Traders interpreted the RBNZ’s approach as dovish in terms of immediate cuts but hawkish in signaling the likely end of monetary easing, reinforcing confidence in the New Zealand Dollar.
The US Dollar, by contrast, remained under pressure amid a series of soft domestic data releases. September’s delayed Retail Sales report fell short of expectations, producer prices remained largely flat, and consumer confidence declined, with households expressing concern over rising costs and deteriorating labor market prospects. These indicators suggest that the US economy is experiencing a soft patch, bolstering market expectations that the Federal Reserve may lower interest rates in December.
Market participants are now closely monitoring upcoming US economic releases for further clues on monetary policy. Durable Goods Orders, an advanced gauge of manufacturing activity, are expected to show a slowdown in September, while weekly jobless claims may edge higher, potentially adding further downside pressure on the Greenback.
Technical Analysis
From a technical standpoint, NZD/USD showed positive momentum on intraday charts, breaking a minor bearish trend line and surpassing the 50-day exponential moving average (EMA50).
The pair reached the key resistance zone near 0.5690, supported by strengthening relative strength indicators (RSI), even as these indicators suggest overbought conditions.
Short-term consolidation or a mild retracement below 0.5670 cannot be ruled out before the pair attempts another leg higher. We will likely watch 0.5690 as an immediate barrier, with a break above this level potentially opening the door to 0.5790 in the medium term.
TRADE RECOMMENDATION
BUY NZDUSD
ENTRY PRICE: 0.5680
STOP LOSS: 0.5590
TAKE PROFIT: 0.5790
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