US Dollar pressure lifts New Zealand Dollar ahead of US Midterm elections

• 0.5627 in sight as NZD/USD surges, with US Midterm elections in focus.
• Further monetary tightening remains the expected course for the RBNZ.
• NZ Q3 labour market figures are also on investors’ radar.

NZD/USD is up 0.22% near 0.5627. On Tuesday, the New Zealand Dollar (NZD) is posting sharp gains against its peers, with the Canadian Dollar (CAD) the exception.

Support for the Kiwi has held firm around 0.5600 following last week’s Reserve Bank of New Zealand (RBNZ) policy announcement. The central bank unexpectedly kept interest rates on hold.

RBNZ pause: Commerzbank sees limited NZD downside

The Reserve Bank of New Zealand has not shifted towards an easier policy stance, according to Commerzbank strategists. They characterise its latest decision as “more of a pause than a dovish pivot.” Further tightening remains their base case, and they “continue to expect two further hikes, in December and 1Q27, which should limit further NZD downside.”

Wednesday’s release of New Zealand (NZ) Q3 employment figures is the next focus for investors.

Forecasts put the Labour Cost Index at 0.5%, below the 0.7% recorded in this year’s second quarter. The Unemployment Rate is expected to ease to 5.5%, compared with the previous 5.6%.

For the US Dollar (USD), attention is turning to the United States (US) Midterm elections. At the time of writing, the US Dollar Index (DXY), a measure of the Greenback against six major currencies,

70% sweep odds: Democrats favoured in US midterms

With “the US midterm elections will be held on Tuesday,” Brown Brothers Harriman strategists point to “Democrats widely expected to win the House of Representatives.” The Senate race is less clear-cut: “Senate control is much closer, but the tide favors the Democratic party,” they say. They note that “Democrats need a net gain of four seats to secure a majority in the Senate” — a goal they describe as “within reach as Republicans are defending six of the seven toss-up seats.”

A Democratic victory in both chambers would, in BBH’s assessment, be largely anticipated. Betting markets “favor a Democratic sweep,” the firm notes, with Polymarket and Kalshi “putting the odds around 70%.” That pricing “points to a relatively muted initial market reaction if Democrats win both chambers,” in its view. By contrast, “a Republican Senate hold would be the bigger surprise and could spark more market volatility.”

0.5651 Resistance: NZD/USD Technical Analysis

At 0.5619 on the daily chart, NZD/USD remains below its 20-period Exponential Moving Average (EMA) of 0.5651, leaving the near-term outlook bearish. Failure to regain this short-term average indicates that rallies still face a ceiling. Meanwhile, the Relative Strength Index (RSI), around 40, signals improving but subdued momentum. This favours consolidation rather than a full reversal.

A sustained move above the 20-period EMA at 0.5651, the immediate resistance level, would be required to relieve the prevailing downward pressure. The supplied dataset yields no nearby technical support levels. Traders may therefore turn to earlier swing lows on the wider chart to identify potential demand zones. Until the pair recovers above the EMA, the directional bias remains negative.

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