The New Zealand dollar remains under pressure, consolidating just below the 0.6000 mark as the Reserve Bank of New Zealand's dovish pivot and looming global trade tensions sap bullish momentum. NZDUSD is trapped in a tight 0.5960–0.6020 range, with traders hesitant to take directional bets ahead of key August catalysts.
The RBNZ's May rate cut to 3.25%—its first in the current easing cycle—was paired with a clear signal of more, with terminal rates projected near 2.85% by early 2026. Market pricing now implies a 75% probability of another 25-basis-point cut at the central bank's August meeting. Domestic demand remains soft, and fiscal drag has grown as government stimulus fades.
At the same time, the broader US dollar has softened, but gains for the kiwi have been capped by tariff uncertainty tied to the US administration's pending decisions ahead of the August 1 deadline. These concerns triggered a ~0.7% pullback in NZDUSD on July 22, underscoring market sensitivity to trade headlines.
Technically, the pair posted a bullish engulfing candle on July 23, suggesting near-term support near 0.5965–0.6000. However, resistance at 0.6028–0.6035 has proven stubborn. A clean break above could open a path toward 0.6075, while a dip below 0.5960 exposes downside risks to 0.5900.
1. RBNZ easing & fiscal headwinds
The Reserve Bank of New Zealand cut rates to 3.25% on May 28 and flagged further easing down to ~2.85% by early 2026 amid trade uncertainty and weak domestic demand. Markets currently price a ~75% chance of another 25bp cut in August.
2. US dollar & tariff uncertainty
Despite broad USD weakness, tariff risks ahead of the August 1 US deadline have injected volatility and capped NZD gains around the 0.5970–0.6000 zone. The pair pulled back ~0.7% on July 22 amid such concerns.
3. Technical & sentiment picture
NZDUSD is consolidating in a 0.5960–0.6020 range. Short-term momentum research shows mixed signals, though daily candles flipped bullish with a strong engulfing pattern on July 23. Resistance sits near 0.6028‑0.6035, with support at 0.6000‑0.5965.
Summary
The pair remains range-bound and cautious: further NZ rate cuts and US data will drive the next moves. A break above 0.6035 opens a climb toward 0.6075, while a drop below 0.5960 risks falling to 0.5900.
NZDUSD – H4 Timeframe
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On this NZDUSD 4-hour chart:
Price recently broke out of a consolidation range to the upside, creating a series of bullish impulse moves followed by corrective pullbacks.
Two bullish breakouts are visible, each marked by short consolidation ranges followed by higher highs (black arrows).
After peaking just above 0.6060, price began a retracement, dipping below the 23.6% Fibonacci level and testing the 38.2% Fib retracement zone.
The red ascending trendline (short-term bullish structure) has been broken, suggesting a deeper retracement may be underway.
Price is approaching a broader confluence zone around the 61.8%–78.6% Fib levels and just above the larger ascending trendline from mid-June — this overlaps with a previous demand area.
A significant bullish reaction is anticipated near the 0.5915–0.5930 zone (boxed area).
My Trading Plan:
I'll watch for price to fall into the 0.5915–0.5930 demand zone (between the 78.6% and 98.2% Fibonacci levels), aligning with the broader ascending trendline support.
If a bullish candlestick pattern (like an engulfing bar, pin bar, or strong rejection wick) prints in that zone, I'll look to go long.
The initial target is a retest of the 0.6060 high, and if momentum is strong, the price may extend further above that level.
If price breaks and closes below the broader ascending trendline and the 0.5900 handle, the bullish setup will be invalidated, and I'll stay on the sidelines.
Direction: Bullish
Target- 0.60327
Invalidation- 0.58990
CONCLUSION
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