NZD/USD Price Forecast: Eyes break above 0.5640-0.5645 confluence ahead of US CPI

The NZD/USD currency pair is trading positively for the second consecutive day, reaching the 0.5635 level during the initial European session and showing potential to advance further following the robust recovery from April 2025 lows. Market participants remain cautious and are waiting for the forthcoming US Consumer Price Index (CPI) data before making any new bullish or bearish commitments.

The US CPI report will serve as a crucial gauge for the Federal Reserve's (Fed) future monetary policy direction, which will significantly impact the US Dollar (USD) and subsequently influence the NZD/USD pair. In the interim, expectations surrounding Iran's diplomatic efforts may help temper the Federal Reserve's inclination to raise interest rates, thus potentially weakening the safe-haven US Dollar.

From a technical standpoint, the NZD/USD pair trades below a compact cluster of resistance around the 0.5640-0.5645 range, formed by the 100-period Simple Moving Average (SMA) on the 4-hour chart and the 61.8% Fibonacci retracement. Momentum indicators are encouraging, with the Relative Strength Index (RSI) near 61 and the Moving Average Convergence Divergence (MACD) line exhibiting a positive trajectory and rising.

The prevailing technical outlook suggests that buyers still hold a degree of control, but they must successfully surpass these resistance levels to establish a more pronounced bullish trend. The upcoming milestone is positioned at the 78.6% Fibonacci level around 0.5673, followed by the recent high near 0.5712. A decisive break above this confluence would signal a renewed bullish momentum, setting the stage for additional gains.

Conversely, if the pair fails to break above this barrier, it could trigger a bearish cascade, with the 50.0% Fibonacci level around 0.5620 and the 38.2% retracement near 0.5599 acting as the primary support. A more significant downturn would expose the 23.6% retracement at 0.5572, below which the swing low at 0.5528 would serve as the ultimate downside anchor.