NZD/USD Weakens Toward 0.5590 as U.S. Dollar Strengthens Amid Government Shutdown

The U.S. dollar has renewed its July high at 100.01 on the USDX. Amid the ongoing 38-day government shutdown, investors are actively shifting capital into safe-haven assets, including the U.S. currency. According to Bloomberg, the current shutdown carries higher economic risks than previous ones due to broader economic instability. Barclays Plc senior economist Jonathan Millar warned that this time, the consequences could be catastrophic. Around 650,000 federal employees are currently unpaid, food assistance programs are being reduced, preschool education programs are partially suspended, and airports face a shortage of air traffic controllers. Meanwhile, the U.S. Federal Reserve has lowered the interest rate from 4.25% to 4.00% and is expected to pause further policy adjustments.

The long-term trend remains bearish: the price has broken through the 0.5695 support level and is now approaching 0.5590. A breakout below this mark could lead to a test of the annual low at 0.5510. Otherwise, a short-term correction toward resistance at 0.5695 is likely, where short positions targeting 0.5590 would again become relevant. A sustained move above 0.5695 could open the way to 0.5800. The pair remains below both the EMA (21) and EMA (190), confirming both short- and long-term bearish momentum. The RSI (14) indicator has entered oversold territory, suggesting that traders may consider locking in short positions.

The medium-term trend is also bearish: in mid-October, traders tested zone 2 (0.5727–0.5713) and broke lower toward zone 3 (0.5597–0.5584). A corrective move toward the 0.5752–0.5739 area may form before the next decline toward targets at 0.5680 and 0.5609. If the resistance area 0.5752–0.5739 is broken, the trend could reverse upward with targets near 0.5882–0.5869.

Support and Resistance Levels

Resistance levels: 0.5695, 0.5800, 0.5887.

Support levels: 0.5590, 0.5513, 0.5467.

Trading Scenarios and NZD/USD Forecast

Short positions can be opened from 0.5695 with a target of 0.5590 and a stop-loss at 0.5724. Implementation period: 9–12 days.

Long positions can be opened above 0.5724 with a target of 0.5800 and a stop-loss at 0.5590.