NZD/USD Steadies Amid Labour Market Concerns and Fed Rate-Cut Expectations

Fundamental Overview

NZD/USD trades near 0.5660 on Thursday, holding steady after failing to extend its recent three-day rally. The pair remains under mild pressure as weak New Zealand labour data heightens expectations of further Reserve Bank of New Zealand (RBNZ) easing.

Employment growth slowed notably in Q3, while the unemployment rate held at 5.3%, its highest in nine years. Markets now price in a 25-basis-point rate cut in December, with some risk of a deeper move, as stable inflation expectations give the RBNZ policy room.

In the U.S., the Dollar remains soft despite the official end of the government shutdown. Traders continue to reassess Federal Reserve rate-cut odds, which eased to 52.7% from 63% a day earlier, as officials remain divided on the pace of policy easing.

NZD/USD Technical Analysis – Daily Chart

Technical Overview

• NZD/USD trades within a downward channel and remains below all key SMAs.
• RSI sits in the selling zone, while Stochastic signals a neutral bias.

Key Levels to Watch:

• Resistance: 0.5720
• Support: 0.5609

Trading Outlook

The pair continues to consolidate after finding support near 0.5610. A breakout above 0.5720 could signal a short-term bullish reversal, while sustained weakness below 0.5610 may trigger renewed selling pressure.

Trade Suggestion:

• Sell Limit: 0.5689
• Take Profit: 0.5630
• Stop Loss: 0.5735

FAQ

Q1: Why is the NZD under pressure?
Weak labour market data and rising expectations of an RBNZ rate cut are weighing on the New Zealand Dollar.

Q2: What’s limiting USD gains?
Despite the government reopening, investors remain cautious as the Fed’s next rate move remains uncertain.

Q3: What are key levels to watch?
Resistance at 0.5720 and support at 0.5609 will guide near-term direction.

Q4: What could change NZD/USD’s outlook?
A breakout above resistance could confirm a bullish reversal, while renewed USD strength or weak NZ data may push the pair lower.

Disclaimer

This report is for informational purposes only and should not be considered financial advice. Market conditions and data are subject to change without notice.