Key Moments
- NZD/USD trades around 0.5935, slightly under pressure during the late Asian session while staying above key moving averages.
- The US Dollar Index (DXY) holds near 98.50, close to its weekly high of 98.60 reached on Wednesday.
- Fed rate-hike odds for at least one increase this year stand at 32.2%, up from almost zero a month earlier, according to the CME FedWatch tool.
Kiwi Under Mild Pressure as Markets Await Trump-Xi Outcome
The NZD/USD pair is trading modestly weaker around 0.5935 in the late Asian trading hours on Thursday. The currency pair shows a cautious tone as broader risk sentiment remains reserved, with investors focused on the outcome of the meeting between United States (US) President Donald Trump and Chinese leader Xi Jinping.
At the time of writing, Asian equity markets are generally lower, with Japan’s Nikkei 225 slipping 0.3% to around 63,070. The US Dollar Index (DXY), which measures the Greenback against six major peers, is trading firmly near 98.50, hovering just below its weekly peak of 98.60 set on Wednesday.
The result of the discussions between Trump and Xi is seen as particularly important for the New Zealand Dollar (NZD), as New Zealand is a significant trading partner of China.
Fed Expectations Firm as Inflation Pressures Build
In the US, higher inflation pressures driven by elevated energy prices have fueled expectations that the Federal Reserve (Fed) could raise interest rates this year.
Data from the CME FedWatch tool show that the probability of the Fed delivering at least one interest rate hike this year is 32.2%, a sharp increase from almost nil one month ago.
NZD/USD Technical Setup: Key Levels in Focus
NZD/USD is trading slightly lower at approximately 0.5935, yet it maintains a mildly constructive tone as it remains above both the 20-day Exponential Moving Average (EMA) at 0.5909 and the 50.0% Fibonacci retracement at 0.5890. The pair is currently testing a dense area of overhead Fibonacci retracement levels.
The 14-period Relative Strength Index (RSI) near 55 indicates positive, though not excessive, momentum. This suggests that pullbacks may find demand as long as the price holds above the nearby moving average support.
| Indicator / Level | Price | Role |
|---|---|---|
| Spot NZD/USD | 0.5935 | Current trading level |
| 20-day EMA | 0.5909 | Initial support |
| Fibonacci 23.6% | 0.5782 | Deeper downside level |
| Fibonacci 38.2% | 0.5842 | Secondary downside level |
| Fibonacci 50.0% | 0.5890 | Nearby support |
| Fibonacci 61.8% | 0.5939 | Immediate resistance |
| Fibonacci 78.6% | 0.6008 | Next resistance zone |
| Fibonacci 100.0% | 0.6095 | Recent swing high region |
| Structural floor | 0.5686 | More distant support |
On the upside, the first resistance level stands at the 61.8% Fibonacci retracement near 0.5939. A break above this zone would bring the 78.6% level at 0.6008 into view, followed by the recent swing high area aligned with the 100.0% retracement at 0.6095.
On the downside, initial support is located at the 20-day EMA around 0.5909, ahead of the 50.0% retracement at 0.5890. A more pronounced decline would turn attention to the 38.2% level at 0.5842 and the 23.6% retracement at 0.5782, with the 0.5686 region serving as a more distant structural base.
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