NZD/USD Price News & Forecast: Kiwi Tests 0.5770 as New Zealand Data Weighs on Sentiment

In September, the seasonally adjusted deficit widened by NZD 153.0 million to NZD 3.8 billion. The primary income balance deteriorated by NZD 435.0 million, while the goods balance declined by NZD 414.0 million in the third quarter. The primary income deficit accelerated by NZD 3.0 billion, driven mainly by a net outflow of investment income, primarily in the form of dividend payments abroad. Profits of foreign investors rose by NZD 200.0 million, while earnings of domestic investors fell by NZD 293.0 million due to weaker results from overseas subsidiaries. As a result, the annual current account deficit amounted to NZD 15.4 billion, or 3.5% of GDP, improving from NZD 16.3 billion, or 3.7% of GDP, recorded in the second quarter.

The US dollar, which remains the key driver for the pair, is showing a neutral tone, trading near 98.00 on the USDX amid mixed investor reactions to macroeconomic data. The delayed October nonfarm payrolls report showed a decline of 105.0 thousand jobs, while government employment fell by 157.0 thousand. In November, however, the figures improved, with employment changes of 52.0 thousand in the private sector and –5.0 thousand in the public sector. Market participants are now awaiting December data, which should better reflect labor market conditions after the government returned to full operations. The unemployment rate rose from 4.4% to 4.6%, confirming Federal Reserve Chair Jerome Powell’s assessment of a notable cooling in the labor market, which supported the decision to cut interest rates in December. Although the Fed intends to pause its dovish cycle, weak data could revive expectations for further easing. According to the CME FedWatch Tool, the probability of rates remaining unchanged currently stands at 75.6%.

Support and resistance levels

The instrument is correcting lower, approaching the previously broken resistance line of the channel with dynamic boundaries at 0.5770–0.5570.

Technical indicators are generating a buy signal that may strengthen in the near term: the fast EMAs of the Alligator indicator are moving away from the signal line, while the Awesome Oscillator histogram is forming rising bars above the zero line.

Resistance levels: 0.5810, 0.5910.

Support levels: 0.5740, 0.5620.

Trading scenarios and NZD/USD outlook

Long positions can be considered after a breakout and consolidation above 0.5810, with a target at 0.5910 and a stop loss at 0.5760. Time horizon: 7 days or more.

Short positions can be considered after a decline and consolidation below 0.5740, targeting 0.5620 with a stop loss at 0.5800.