New Zealand Dollar steadies off two-week lows following dovish RBNZ survey

The New Zealand Dollar (NZD) has shown signs of stability as it moves away from its two-week lows, stabilizing around the mid-0.5800s in the American trading session. This shift comes after the US Dollar (USD) lost some of its momentum. According to a survey conducted by the Reserve Bank of New Zealand (RBNZ), inflation expectations for the third quarter have decreased to 2.34% from the prior 2.53%.

This easing in inflation expectations places less pressure on the central bank to increase interest rates, allowing the NZD to recover. Conversely, the US Dollar is facing headwinds due to weak US producer prices and an uptick in weekly Initial Jobless Claims, which has dampened expectations of further Federal Reserve (Fed) tightening.

Despite this, the NZD's movement is somewhat restrained by the ongoing concerns surrounding Middle East tensions. The technical analysis indicates that NZD/USD is currently at 0.5851 and is trading below the 20-period Simple Moving Average (SMA) of 0.5864, but it remains slightly above the 100-period SMA at 0.5843. The Relative Strength Index (RSI) is reported at 43, suggesting a soft but not oversold sentiment, implying that sellers still hold power, although the downward momentum is moderate rather than severe.

The immediate support level is near 0.5845, underpinned by the 100-period SMA at 0.5843 and a horizontal support level at 0.5842. However, strong resistance levels are present at 0.5853, 0.5858, 0.5907, 0.5930, and 0.5965, with the latter indicating a potential move beyond the current levels.