New Zealand Dollar gains momentum to near 0.5900, US NFP data looms

The New Zealand Dollar (NZD) strengthened to near 0.5895 during Asian trading hours on Friday, as the US Dollar (USD) softened against the Kiwi following remarks from Federal Reserve (Fed) Governor Christopher Waller. Traders anticipate the US August employment report later on Friday. Waller indicated on Thursday that he is inclined to maintain interest rates steady at the Fed's September meeting, assuming there are no surprises in upcoming inflation data.

This has decreased bets on a US rate hike during the current month, impacting the Greenback. The odds of a quarter-point hike in September have fallen to nearly 50.2%, down from 63.2% on Wednesday, according to the CME's FedWatch tool. Meanwhile, New Zealand's Reserve Bank (RBNZ) could weaken the Kiwi with a dovish interest rate hike.

RBNZ Governor Anna Breman suggested a further increase in the Official Cash Rate (OCR), but policymakers aim to assess the impact of past hikes. Assistant Governor Karen Silk stated that the central bank is more likely to wait until December for another rate increase. Analysts at Commerzbank noted that the RBNZ was cautious not to commit to a fixed rate path and signaled that further tightening is possible but contingent on persistent inflation and economic recovery.

The NZD/USD chart shows a mild bullish bias, with the pair trading above the 100-day simple moving average (SMA) and lower Bollinger Band, indicating underlying demand during dips. However, the price is still under the Bollinger 20-period SMA, and the Relative Strength Index (RSI) is near 51, suggesting only modest positive momentum.

The top resistance is the Bollinger middle band at 0.5910, while the next upside barrier is the upper band around 0.5985. On the downside, support is at the 100-day SMA near 0.5845, with the lower Bollinger Band at 0.5832 as the next level of support.