0.5567 YTD Low in Sight: NZD/USD Price Forecast as Pair Seeks Direction

• 0.5584 marks the low from which NZD/USD has recovered. Gains remain limited to the lower 0.5600s.
• Following the RBNZ's decision to keep interest rates unchanged, the Kiwi remains under selling pressure.
• Early Asian trading brought some relief for the Kiwi as the Fed struck a dovish tone.

NZD/USD trades at 0.5615 as the European session opens. Thursday's retreat has erased earlier gains in the New Zealand Dollar (NZD) against the US Dollar (USD), taking the pair into negative territory on the daily chart. The immediate downtrend remains intact after Wednesday's fall of nearly 1%. During Asian trading, the recovery from the 0.5584 low stalled around 0.5635.

Expectations of a 25-basis-points increase were disappointed on Wednesday when the Reserve Bank of New Zealand (RBNZ) kept interest rates steady, sending the Kiwi sharply lower. The NZD stayed under pressure despite Governor Anna Breman signalling further rate rises in December.

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

Although Warsh signalled more monetary tightening ahead, he declined to specify when. 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 a potentially lower-than-expected terminal interest rate.

0.5567 Low Within Reach: NZD/USD Technical Outlook Remains Bearish

At 0.5619, NZD/USD retains a bearish short-term bias. Buyers were unable to establish a foothold above 0.5635 earlier in the day. A retreat towards the low-30s in the Relative Strength Index (14), alongside a Moving Average Convergence Divergence (MACD) reading below zero, indicates that selling pressure persists.

The intraday peak at 0.5637 provides the first resistance hurdle. Beyond it lies the 0.5700 area, which blocked advances on 21, 25 and 27 October, followed by the 22 September high near 0.5750.

Sellers are likely to encounter an initial test at Wednesday's 0.5584 low before reaching the previously mentioned 18-month low of 0.5567, recorded earlier in October. Below that, a plausible target appears to be near 0.5530, the 127.2% Fibonacci retracement of the June-August rally.

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