NZD/USD is trading on a bullish note near the 0.5710 area on Tuesday as the US Dollar (USD) weakens amid improved risk sentiment amid hopes for a ceasefire in the Middle East.
The dollar is losing momentum as markets move away from its safe-haven position. Despite Donald Trump’s forceful rhetoric on the Strait of Hormuz, investors are focusing more on emerging diplomatic efforts and de-escalation opportunities, which is supporting risk-sensitive currencies such as the New Zealand dollar (NZD).
Additionally, a moderate decline in profitability in the US combined with worse-than-expected ISM Services data – in particular a decline in employment – put pressure on the dollar. While components of inflation such as prices paid remain elevated, markets are increasingly concerned that growth may snail-paced, complicating the outlook for the Federal Reserve (Fed).
On the New Zealand side, the NZD is finding support ahead of a policy decision from the Reserve Bank of New Zealand (RBNZ) at the end of the week. Markets widely expect the central bank to maintain current interest rates, but any change in tone or guidance could impact Kiwi’s next move. Traders are also paying attention to global risk appetite, given New Zealand’s sensitivity to external demand.
Short-term technical analysis:
On the 4-hour chart, the NZD/USD rate is 0.5713. The short-term bias is slightly bearish as the pair holds below the falling 20-period and 100-period plain moving averages (SMAs), which cap the upside near 0.5715 and 0.5785, respectively. The falling structure of both averages suggests that sellers will maintain control after a continued downward trend from the 0.58 area. The RSI at 46 remains below the 50 midline, matching subdued bullish momentum rather than oversold conditions and strengthening the current downward bias.
Immediate resistance appears at 0.5721 and then at 0.5730, where short-term supply converges with the nearby 20-period SMA and could attract fresh selling following intraday bounces. A sustained break above 0.5730 would open the way to the 0.5800 barrier. On the other hand, initial support is seen at 0.5712, with a break at 0.5706; a significant move below this band would confirm renewed bear pressure and threaten to extend the broader decline.
(The technical analysis for this story was written with the facilitate of an AI tool.)
