NZD/USD fell by nearly 0.8% after two days of gains and traded near 0.5710 during European hours on Thursday. It remains in a descending channel, with price below the nine-day EMA and the 50-day EMA lower.
The 14-day RSI is at 35 and stays below the midline, pointing to weak momentum. Immediate support is the four-month low at 0.5699, set on 31 March.
Key Support Levels
Further support sits near the channel’s lower boundary around 0.5640. A break below the channel could bring focus to 0.5580, the 11-month low last seen in November 2025.
On the upside, resistance is at the nine-day EMA near 0.5764. Other resistance levels are around 0.5820 at the channel’s upper boundary and the 50-day moving average at 0.5857.
If price moves above these levels, it could then target 0.5996, the monthly high recorded on 2 March. The technical analysis was produced with assistance from an AI tool.
We are seeing the NZD/USD pair testing its four-month low around the 0.5700 handle, which signals clear downward momentum for the coming weeks. The persistent selling pressure suggests considering strategies that profit from further declines, such as buying put options. The weak Relative Strength Index near 35 reinforces the view that sellers are currently in control of the market.
Risk Management Signals
This technical weakness is supported by fundamentals, as we saw US non-farm payrolls add a surprisingly strong 265,000 jobs last month. In contrast, New Zealand’s latest inflation figures recently printed at 2.9%, fueling speculation that the Reserve Bank of New Zealand may consider rate cuts later this year. This policy divergence between central banks continues to heavily favor the US dollar.
For traders positioning for a continued slide, the next immediate target is the descending channel’s lower boundary near 0.5640. Buying put options with a strike price around 0.5650 could be a viable strategy to capture this potential move. A break below this level would bring the lows from November 2025, around 0.5580, into focus as a secondary target.
We must also manage risk, as any reversal could be sharp, and the pair has been in this range for some time. A daily close above the nine-day EMA near 0.5764 would serve as the first warning that bearish momentum is fading, requiring a re-evaluation of short positions. Any options strategies should therefore be structured with this key resistance level in mind as a potential invalidation point for the bearish outlook.