New Zealand Dollar steadies after two-month low slide
NZD/USD is clinging to the 0.5800 mark at the start of the Asian session on Friday after dipping to a near two-month low around 0.5797 earlier in the American session.
The New Zealand Dollar steadies near 0.5800 following a two-month decline. After touching a two-month low around 0.5797 earlier in the American session, the currency has since regained roughly unchanged levels. A surge in US Producer Price Index (PPI) final demand prices rose 5.4% year-over-year in August. New Zealand's Business NZ Manufacturing PMI for August is reported later on Friday.
The next significant test is the US Consumer Price Index (CPI), which will influence Federal Reserve expectations ahead of their upcoming meeting. A strong CPI report would exert additional downward pressure on NZD/USD, while a weak print might provide the Kiwi with room to recover. The 4-hour chart shows NZD/USD trading at 0.5800, remaining in a bearish short-term pattern as it stays below the 20-period and 100-period Simple Moving Averages (SMAs) of approximately 0.5844 and 0.5907, respectively.
The Relative Strength Index (RSI) remains in oversold territory near 28, indicating that downside momentum is stretched but not entirely exhausted. Price action is constrained by these key overhead averages. The next resistance level is at 0.5808, followed by a more significant barrier at 0.5832. The 20-period SMA is located at 0.5844, while the 100-period SMA stands at 0.5907, reinforcing a higher supply zone.
On the downside, immediate support is found at 0.5797, with a break potentially exposing further declines and extending the current bearish phase despite the oversold RSI level.
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