NZD/USD Forecast: Kiwi Weakens Toward 0.5700 After RBNZ Rate Cut

The New Zealand Dollar (NZD/USD) extended its decline for a third straight session on Wednesday, trading near 0.5830 during the Asian hours. The pressure came after the Reserve Bank of New Zealand (RBNZ) announced a widely expected 25 basis point rate cut, lowering the Official Cash Rate (OCR) to 3%.

RBNZ Rate Cut Weighs on NZD

The RBNZ’s policy move added to bearish sentiment surrounding the Kiwi, as markets had already priced in a dovish outlook amid slowing domestic growth and weakening demand. With this cut, traders are now bracing for the possibility of additional easing later in the year if economic conditions remain fragile.

Technical Outlook: Bearish Momentum Persists

From a technical perspective, NZD/USD continues to trade within a descending channel, reflecting a persistent bearish trend.

• The pair remains below the nine-day Exponential Moving Average (EMA) at 0.5908, signaling weak short-term momentum.
• The 14-day Relative Strength Index (RSI) stays under the 50 level, further confirming downside pressure.

On the downside, the immediate support sits near 0.5770, the lower boundary of the descending channel. A decisive break below this zone could accelerate losses toward 0.5485, a level not seen since March 2020.

Upside Scenarios: Resistance Levels to Watch

Any recovery attempt would first face resistance at the nine-day EMA (0.5908), followed by the 50-day EMA (0.5953). A breakout above 0.5980, the upper channel boundary, could shift sentiment and open the door for a rally toward the 10-month high of 0.6121 reached on July 1.

Outlook for Traders

Overall, the NZD/USD outlook remains tilted to the downside in the near term, with further losses likely if support at 0.5770 fails to hold. However, stronger recovery above the EMA resistance zone could spark a shift in momentum, offering a potential bullish reversal opportunity.

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