NZD/USD Dips Below 0.5600 as Bearish Trend Persists
The New Zealand Dollar (NZD) continued its decline against the US Dollar (USD) on Tuesday, dropping to around 0.5590 during the early European trading session. The bearish trend persisted despite the Relative Strength Index (RSI) indicating oversold conditions, with the first downside target identified at 0.5555. Immediate resistance is seen at 0.5626.
The NZD/USD pair has been under pressure due to rising US Treasury yields and uncertainty ahead of the November general election. Markets are currently pricing in a 58% chance of a 25-basis-point rate hike to 3.0% by the Reserve Bank of New Zealand (RBNZ) later this month, with a December rate hike already more than fully priced in.
Traders are awaiting the release of the minutes from the September Federal Open Market Committee (FOMC) meeting on Wednesday, which could provide insights into future monetary policy. The US Dollar has strengthened following a hawkish speech by Fed’s Logan, who emphasized the need for higher interest rates and tighter policy conditions.
Technical analysis shows that the NZD/USD pair remains in a bearish near-term bias, with the price pressing toward the lower Bollinger band. The RSI is in oversold territory around 24.5, suggesting that bearish momentum is stretched but not yet reversed. A decisive break below 0.5555 could open the way for further declines to 0.5520 and 0.5485.