NZDUSD Navigating Bearish Trends Amid Global Uncertainty

The NZDUSD has been on a bearish trajectory since late September, driven by technical signals like the “Death Cross” and declining momentum indicators. This trend reflects broader economic uncertainties, including shifting global trade dynamics and divergent monetary policy responses from the RBNZ and the Federal Reserve. Together, these forces shape the complex outlook for the currency pair.

Wednesday 2:30 am (GMT+2) – Australia: GDP q/q (AUD)
Wednesday 15:15 (GMT+2) – USA: ADP Nonfarm Employment Change (USD)
Wednesday 17:30 (GMT+2) – USA: ISM Services PMI (USD)
Thursday 15:30 (GMT+2) – USA: Unemployment Claims (USD)
Friday 15:30 (GMT+2) – Canada: Employment Change (CAD)
Friday 15:30 (GMT+2) – USD: Nonfarm Employment Change (USD)

Since peaking at 0.63775 on September 30, the New Zealand dollar (NZD) has experienced significant depreciation against the US dollar (USD). This decline has been influenced by a combination of technical indicators that suggest persistent bearish momentum. In particular, the appearance of a Shooting Star candlestick reversal pattern indicated that buyers were unable to maintain the uptrend, signaling the onset of a downward trend.
The decline was further intensified by prices falling below the 20-period and 50-period Exponential Moving Averages (EMAs), a significant technical indicator that supported the bearish outlook. Additionally, the crossover of the shorter 20-period EMA beneath the longer 50-period EMA created a “Death Cross” pattern, which further increased negative momentum. Supporting these developments, both the Momentum Oscillator and the Relative Strength Index (RSI) fell below their respective thresholds of 100 and 50, which validated the downward trend.

If buyers take control of the market, traders may shift their focus to the following four potential resistance levels:
0.59277: The initial price target is identified at 0.59277, corresponding to the swing high marked on November 29.
0.60178: The second level of resistance is established at 0.60178, which aligns with the weekly resistance, R2, estimated using the standard Pivot Points methodology and the 38.2% Fibonacci Retracement drawn from the high point, 0.63775, to the low point, 0.57959.
0.60864: The third price target is determined at 0.60864, representing the weekly resistance, R3, estimated using the standard Pivot Points methodology
0.61550: An additional price objective is estimated at 0.61550, mirroring the 61.8% Fibonacci Retracement drawn from the high point, 0.63775, to the low point, 0.57959.

If sellers maintain control of the market, traders may focus on the following four key support levels:
0.57959: The initial support level is established at 0.57959, representing the swing low marked on November 26.
0.57459: The second support level is seen at 0.57459, aligning with the weekly support, S2, estimates using the standard Pivot Points methodology.
0.56959: The third downside target is 0.56959, corresponding to the weekly support, S3, calculated using the standard Pivot Points methodology.
0.55826: An additional downside target is observed at 0.55826, reflecting the 261.8% Fibonacci Extension drawn from the swing low, 0.57959, to the swing high, 0.59277.

The Reserve Bank of New Zealand (RBNZ) is preparing for potential global trade disruptions, including a US-China trade war, as outlined by The Wall Street Journal. Following US President-elect Donald Trump’s proposed tariffs, concerns of inflation and economic volatility are rising.
RBNZ Deputy Governor Christian Hawkesby emphasized the importance of stabilizing inflation to better manage future shocks. While the central bank has recently cut rates to support growth, it is closely monitoring risks such as inflation spikes, trade disruptions, and financial instability, aiming to safeguard the economy.
On the other hand, US job openings in October rose to 7.74 million, exceeding expectations, while hiring fell to 5.31 million amid labor strikes and storms in the Southeast. The ratio of openings to unemployed workers increased to 1.1, reflecting labor market shifts from 2022 highs.
Layoffs declined, while voluntary quits rose to 3.33 million, signaling some worker confidence. However, nonfarm payroll growth hit its lowest since December 2020 at just 12,000.
The Federal Reserve monitors these trends closely and is expected to lower interest rates later this month to address potential labor market weaknesses.

The NZDUSD remains under pressure from persistent bearish momentum, influenced by technical patterns like the “Death Cross” and macroeconomic uncertainties. Key resistance and support levels highlight potential market pivots, while global factors—such as shifting trade policies, RBNZ strategies, and US labor market dynamics—add complexity to the outlook. Traders should remain vigilant as upcoming high-impact economic events could shape future price movements.