New Zealand Dollar extends rally as fading Fed-hike bets soften US Dollar

The New Zealand Dollar (NZD) continues its upward trend against the US Dollar (USD) on Friday, reaching near 0.6000, its highest level since late-May. Data released by S&P Global showed private-sector activity picking up, with the Services sector outperforming expectations while Manufacturing fell short of forecasts. This positive news did not encourage the US Dollar, pointing to the Kiwi’s momentum rather than a Federal Reserve (Fed) shift.

China kept its benchmark lending rates stable, providing some relief for currencies tied to Chinese demand, such as the NZD. Precious metals, including Gold and Silver, saw strong demand, and the Australian Dollar is on track for its longest weekly winning streak since 2020. This optimistic sentiment generally benefits riskier currencies like the NZD, and the currency is capitalizing on it.

The 0.6000 area is the short-term hurdle, with the 2026 high slightly above it. A breach of the 0.5900 region would diminish the current rally. Currently, NZD/USD is at 0.5979, still showing a bullish outlook as it stays above the 20-day and 100-day simple moving averages (SMAs) of 0.5876 and 0.5837. The pair is facing resistance around the horizontal level of 0.5989, while the Relative Strength Index (14) suggests strong momentum but with potential overbought conditions.

Below, support is found at clustered horizontal levels around 0.5939, 0.5930, and 0.5907, which shield the recent progress and provide backing at the 20-day SMA near 0.5876 and the 100-day SMA at 0.5837. A successful breakout above 0.5989 could open the path for further gains, but the primary concern lies in how price behaves at the current ceiling near the 0.6000 handle.