NZD/USD Declines After RBNZ Rate Cut Amid Rising Inflation

In quarterly terms, the Consumer Price Index rose by 2.7%, reaching 3.0% year-on-year — the highest level since June 2024 and the upper boundary of the RBNZ’s target range. The sharpest price growth occurred in the housing and utilities sector: rents increased by 2.6% (the lowest since June 2021 at 2.9%), local taxes and council rates rose by 8.8%, and electricity prices jumped by 11.3% (the highest since 1989 at 12.8%), together accounting for roughly 17% of the total index. The quarterly rise of 1.0% versus the expected 0.8% was mainly driven by a 15.0% surge in vegetable prices.

The U.S. dollar is holding near 98.40 on the USDX index, rebounding from the 97.70 low. Yesterday, White House economic adviser Kevin Hassett stated that the ongoing government shutdown, which has lasted for over 20 days, could end this week. This would allow the long-delayed economic data to be released, potentially increasing volatility for the U.S. currency ahead of the upcoming Federal Reserve meeting.

Support and Resistance Levels

The trading instrument is approaching the support line of a descending channel with dynamic boundaries between 0.5900 and 0.5650.

Technical indicators are reinforcing bearish signals: the fast EMAs of the Alligator indicator are moving further away from the signal line, while the Awesome Oscillator histogram is forming corrective bars in the negative zone.

Resistance levels: 0.5760, 0.5850.

Support levels: 0.5700, 0.5600.

NZD/USD Trading Scenarios and Forecast

Short positions may be opened after the price declines and consolidates below 0.5700, targeting 0.5600. Stop-loss — 0.5750. Implementation period: 7 days or more.

Long positions may be opened after the price rises and consolidates above 0.5760, targeting 0.5850. Stop-loss — 0.5710.