The NZD/USD currency pair is trading close to the 0.5870 mark, reflecting the ongoing influence of the United States Dollar (USD) fortified by cautious remarks from Federal Reserve officials and heightened safe-haven demand linked to geopolitical uncertainties, particularly regarding Iran.
Kansas City Fed President Jeff Schmid emphasized that inflation continues to be the primary concern for the U.S. economy. He indicated the need for the Fed to potentially consider increasing interest rates if inflationary pressures do not stabilize around the target levels. This sentiment was echoed by San Francisco Fed President Mary Daly, who affirmed that bringing inflation back to the 2% target remains the central bank’s foremost objective. Such statements foster expectations that the Fed will maintain a patient approach before contemplating rate cuts.
Analyzing the technical landscape, the NZD/USD displayed a bearish trend in the near term on the 4-hour chart, trading at 0.5867. The pair remains below both the 20-period and 100-period Simple Moving Averages (SMAs), which stand at 0.5901 and 0.5888, respectively. A horizontal resistance zone has been established between 0.5878 and 0.5888, creating a barrier against any upward movement. The Relative Strength Index (RSI) currently hovers around 35, indicating persistent downward pressure rather than a rebound.
On the upside, initial resistance levels are detected at 0.5878, with further resistance at 0.5881. The 100-period SMA and the horizontal resistance around 0.5888 create a more formidable barrier, followed by the 20-period SMA at 0.5901. An upward breach of this resistance zone would be necessary to alleviate the current bearish sentiment.
Conversely, immediate support is positioned at 0.5865, where a horizontal level acts as a firm foundation. A definitive break below this support level could pave the way for further declines in the near term.
