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Currencies NZD/USD

NZD/USD Under Pressure as US-China Trade Tensions Flare and US Dollar Strengthens in Advance of Important US GDP Release

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  • May 29, 2025
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NZD/USD currency pair declined to close to 0.5935 in early Asian trading on Thursday under pressure from a stronger US Dollar as well as strengthened US-China trade tensions. The suspension of vital technology sales to China by the Trump administration, as well as strengthened restrictions by China on mineral exports, has increased fears of supply chain disruptions. In the meantime, the Reserve Bank of New Zealand’s 25-basis-point rate reduction last week was partially defused by hints that easing is coming to an end. Contributing to volatility, a US federal court halted Trump’s sweeping “Liberation Day” tariffs, further bolstering the US Dollar. Market participants now look to the US Q1 GDP preliminary reading, which can greatly impact the pair’s short-term direction. KEY LOOKOUTS • Any intensification or relaxation of trade tensions between the US and China would have a major influence on NZD/USD, as New Zealand has a significant trade relationship with China. • The first release of US GDP figures will also be watched closely. A softer-than-anticipated reading can soften the US Dollar and see support for the Kiwi. •   Expectations of future Reserve Bank of New Zealand rate cuts remain subdued. Any shifts in RBNZ tone or policy signals may affect NZD/USD sentiment. •  General strength or weakness of the US Dollar, dependent on items like court decisions regarding tariffs and overall economy data, will remain a fundamental driver for the currency pair. Market players will be paying close attention to a number of factors influencing the near-term direction of NZD/USD. Excluding tensions between the US and China are a key risk, as further escalation may bear down on the New Zealand dollar owing to its trade dependence on China. Another key event is the US Q1 GDP preliminary figure, with the release potentially weakening the US Dollar and providing respite to the Kiwi if softer than anticipated. In turn, the Reserve Bank of New Zealand’s conservative approach to further rate reductions implies muted downside from monetary policy, but any change in tone would be able to rapidly influence market sentiment. Lastly, the overall resilience of the US Dollar, driven by legal updates regarding tariffs and economic prints, will remain a significant driver for the direction of the pair. NZD/USD also involve the ongoing US-China trade tensions, which can put pressure on the Kiwi because of New Zealand’s close relationship with China. Market participants are also concerned about the upcoming US Q1 GDP release as weaker-than-expected data can weaken the US Dollar and favor NZD/USD. Moreover, any changes in the RBNZ’s monetary policy expectations and overall US Dollar strength will be key considerations. •  Silver is also fluctuating around the nine-day EMA at around $33.10 and serves as a near-term support. • NZD/USD sagged to around 0.5935 against a stronger US Dollar and escalating US-China trade tensions. • The Trump administration halted US sales of key US technologies to China as a counter-measure to China’s export curbs on minerals. •  New Zealand’s proximity of trade with China exposes the Kiwi to worsening US-China relations. •  The Reserve Bank of New Zealand lowered its Official Cash Rate by 25 basis points to 3.25%, but suggested easing may be approaching its conclusion. •  Market expectations of another RBNZ rate cut in July have considerably decreased. • A US federal court stopped Trump’s sweeping “Liberation Day” tariffs, which strengthened the US Dollar. • Traders look for the US Q1 preliminary GDP figures, which can shape the US Dollar and NZD/USD trend. Escalating tensions between the United States and China have brought uncertainly to New Zealand’s currency, as the nation has strong trade links with China. The recent move by the US government to limit the sale of key technologies to China is in retaliation to China imposing its own export restrictions on vital minerals. This tit-for-tat has made people uncertain about the security of global supply chains and subjected markets tied to both economies to stress. NZD/USD DAILY PRICE CHART CHART SOURCE: TradingView Concurrently, the Reserve Bank of New Zealand recently cut its official interest rate but signaled that more cuts may not be soon in the offing, which has somewhat comforted investors. On the American side, a federal court temporarily suspended sweeping tariffs drafted by the Trump administration, causing the US Dollar to rally. Going forward, investors are on the lookout for releases of crucial US economic statistics that would determine the direction of both currencies in the weeks ahead. TECHNICAL ANALYSIS NZD/USD is facing resistance around the 0.5950 level, where sell pressure has developed, curbing upside strength. The pair’s recent slide towards 0.5935 indicates bearish sentiment building support from a stronger US Dollar. Important support levels to pay attention to are around 0.5900, a breach below which could see the downward move gain momentum. To change the short-term attitude back in favor of the upside, a bounce above 0.5950 would be necessary. Market players will also be keeping a close eye on moving averages and momentum indicators for guidance on the pair’s next move. FORECAST NZD/USD currency pair is able to stay above crucial support levels and the US economic data, especially the soon-to-be-released GDP report, arrives weaker than anticipated, the Kiwi may get some reprieve. Weaker US Dollar due to weak US growth figures would tend to lift demand for the New Zealand currency. Also, any indication that the Reserve Bank of New Zealand is approaching the end of its rate-cut cycle would enhance market conviction in the Kiwi to drive a possible rally above resistance levels near 0.5950. On the bearish side, further aggravation of US-China trade tensions could prove significantly bearish for NZD/USD, considering New Zealand’s economic links with China. Additional constraints or retaliatory actions might depress investor sentiment and place bearish pressure on the Kiwi. Additionally, if the US GDP figure comes in stronger than expected or the US Dollar is generally strong as a result of positive economic news or legal decisions, the NZD/USD exchange rate might come up against lower support levels around

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Blog Currencies NZD/USD

NZD Has Key Test At 0.5570 Support with Long-term Risks Downward

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  • January 11, 2025
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You sound like you are talking about the New Zealand Dollar technical outlook in regards to a level, 0.5570. Analysts from UOB Group believe that this level could come under test for the NZD, but that a sustained breach below it is unlikely. In the longer term, they are also seeing increasing risks for the NZD to trend lower, although for this to happen, it would need to break clearly below the 0.5570 support level. If it is unable to do so, support may be found for the NZD at this level or possibly bounce back. This is a type of analysis that helps understand support and resistance levels, which help traders anticipate potential price movements. Keylookouts • NZD will probably test the 0.5570 level, and this level becomes the key support zone in the near term. • The outlook for NZD in the longer term remains increasingly bearish, with risks of further declines if key levels are breached. • In case of a confirmed bearish trend, NZD must break clear below the support level of 0.5570. • A sustained break below 0.5570 seems unlikely; hence, this level may serve as support or act as a reversal point. UOB Group’s FX analysts, Quek Ser Leang and Lee Sue Ann, recommend that the New Zealand Dollar (NZD) test the 0.5570 level, although a sustained break below this level seems unlikely. The NZD may hold support at this level in the near term and potentially prevent a major decline. The longer-term outlook for the NZD, however, has been moving down and analysts point to increased risk of a decline in the currency. The bearish scenario would need the NZD to break convincingly below the 0.5570 level. Until then, the NZD is expected to hold at or above this support level with potential further movement within this range. The NZD is expected to test the 0.5570 support level, but a sustained break below it is unlikely, while the longer-term outlook turns to the downside, and the clear break below 0.5570 would confirm the bearish trend. KEY POINTS 1. The NZD is testing the 0.5570 support level. 2. The immediate perspective of staying below 0.5570 doesn’t look to be in cards. 3. The outlook for NZD in the medium term is increasingly bearish. 4. A confirmed bearish trend for the NZD would occur if it could break below 0.5570 clearly. 5. In case the NZD manages to hold above 0.5570, it would then avoid a quick fall. 6.  Failure to break below 0.5570 can lead to a support or reversal 7. Traders will have to track the price actions around 0.5570 very closely to track the direction going forward. The New Zealand Dollar is testing the 0.5570 support level in the near term. A strong break below this seems unlikely, as it has acted as a key support zone. If NZD can hold above 0.5570, it could avoid a deep decline, with a possibility of finding support or even reversing at this price level. Traders should watch price action closely around this level to gauge the next potential move. With respect to the intermediate-term and long-term, risk is moving downside for the NZD. The break below the support level at 0.5570 would confirm the bearish trend. However, should such a break occur, then it would mark a direction to further downside movements. However, until then, the NZD breaks clearly below 0.5570, the risk is to bounce or trade range-bound. Technical Analysis The New Zealand Dollar is now testing the crucial 0.5570 support level, which has proven strong in recent trading. While a break below this level could happen at some point, a sustained break does not seem probable anytime soon. Meanwhile, the NZD’s long-term trend remains bearish with downside risks continuing to build for the currency. For a confirmed bearish trend to emerge, the NZD needs to break clearly below the 0.5570 support, which would indicate further declines. Until such a break, there is a possibility that the NZD could find support at this level or experience range-bound movement, and therefore, the 0.5570 level is a point of interest for traders to monitor. NZD/USD Daily Price Charts Source TradingView, prepared by Ellyana. FORECAST If the NZD can hold above the 0.5570 support level, then it may be able to push higher, with the next resistance targets likely around 0.5600 and 0.5650. A break above 0.5570 could indicate a change in momentum, which may lead to a rally if market sentiment improves or if positive economic data emerges from New Zealand. However, for a more significant upward move, the NZD would have to hold the upward pressure and break through these resistance levels, which would indicate a continued bullish trend. Monitoring these key levels will be important in determining any potential upside in the near term. If the New Zealand Dollar (NZD) breaks below the critical 0.5570 support level, it could signal the start of a bearish trend, with further downside potential. The next support levels in view will most likely be seen around 0.5500 and 0.5450. If prices are maintained below 0.5570, it could have increased downside risks on the pair as it would show broader market weakness or perhaps worse economic data. The New Zealand dollar will have more downside and a strong clear break below 0.5570 may leave room for lower prices. Traders should look for confirmation of a break below this level to gauge the likelihood of further downward movement.

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