NZD/USD Price Forecast: Is a further recovery towards the 20-day EMA likely?

• Hawkish RBNZ outlook supports further NZD/USD recovery towards 0.5640.
• A December interest rate hike by the RBNZ remains Commerzback’s expectation.
• Uncertainty before US mid-term elections drives a US Dollar rebound.

Recovery momentum in the New Zealand Dollar (NZD) carries it towards 0.5640 against the US Dollar (USD) in Friday’s European trading session. The Kiwi pair began recovering after Wednesday’s turmoil, which followed the Reserve Bank of New Zealand’s (RBNZ) surprise decision to leave the Official Cash Rate (OCR) unchanged at 2.75%.

Against expectations of an increase to 3%, the RBNZ retained the OCR at 2.75%. The central bank nevertheless indicated that the pause was temporary and that monetary tightening would continue, pointing to upside risks to inflation.

Can Commerzbank’s view of an RBNZ pause, not a pivot, steady the NZ outlook?

Rather than marking the beginning of an easing cycle, the latest RBNZ decision is “more of a pause than a dovish pivot,” according to Commerzbank analysts. Despite the currency’s recent weakness, they suggest that the projected policy trajectory “should limit further NZD downside” and “continue to expect two further hikes, in December and 1Q27,”.

Caution before next week’s United States (US) mid-term elections is, meanwhile, drawing buyers to the US Dollar. Having recovered all its earlier losses, the US Dollar Index (DXY) is trading nearly unchanged around 101.84 at the time of writing. The index measures the Greenback against six major currencies.

Will US midterms bring divided government and policy gridlock risks?

A likely split between the White House and Congress underpins Commerzbank analysts’ view that the US is “heading towards what is known as a ‘divided government’,”. Even if lawmaking slows, much of President Trump’s agenda can still proceed, they note, because in areas important to him, “such as foreign and trade policy, he has in any case relied primarily on executive orders recently,”.

NZD/USD Technical Analysis: Can the Recovery Clear Resistance?

The near-term outlook for NZD/USD remains bearish on the daily chart, with the pair trading at 0.5637 below its 20-period Exponential Moving Average (EMA) of 0.5658. Its failure to regain this short-term trend indicator suggests that recent recoveries remain constrained within the broader decline. At 43.4, the Relative Strength Index (RSI) is also below neutral, indicating only limited recovery momentum.

The October 28 low of 0.5584 provides the key downside support. On any advance, the first resistance is the 20-day EMA near 0.5658, where sellers are likely to seek to preserve the prevailing downtrend.

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