NZD/USD Price Forecast: Likely recover further to near 20-day EMA
The New Zealand Dollar (NZD) extends its recovery to near 0.5640 against the US Dollar (USD) during the European trade on Friday.
During the European trading session on Friday, the New Zealand Dollar (NZD) displayed a recovery, reaching near 0.5640 against the US Dollar (USD). This rebound occurred after Reserve Bank of New Zealand (RBNZ) made an unexpected decision to keep its Official Cash Rate (OCR) unchanged at 2.75% during Wednesday's market mayhem. The RBNZ had been anticipated to increase the OCR to 3%, but the decision was interpreted as a temporary pause in monetary tightening, with the central bank maintaining a path of tightening due to concerns about rising inflation risks.
Commerzbank analysts suggested that the RBNZ's move was more of a pause than a sign of easing, and they continue to expect two additional rate hikes in December and Q1 2027. The US Dollar experienced bids due to uncertainty surrounding the upcoming United States mid-term elections. The US Dollar Index (DXY) traded flat around 101.84 after recovering its early losses.
Analysts at Commerzbank noted that the US is heading towards a "divided government," implying that key aspects of President Trump's agenda could continue despite legislative progress slowing. In the daily chart, NZD/USD trades at 0.5637, holding a bearish near-term tone as it remains below the 20-period Exponential Moving Average (EMA) at 0.5658.
The Relative Strength Index (RSI) at 43.4 indicates only modest recovery momentum. The immediate resistance on the upside is the 20-day EMA at 0.5658, where sellers may defend the current downtrend. Conversely, the October 28 low at 0.5584 serves as the key support level.
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