NZD/USD Approaches Key Trendline Support Near 0.5900 Ahead of RBNZ Decision

The NZD/USD pair faced selling pressure after a slight intraday climb to the 0.5930 area, lingering near the lower boundary of its daily range in early European trading on Tuesday. Bears are now looking for a decisive drop below the 0.5900 level to extend the recent pullback from the 0.6000 psychological region, which represented a three‑month high set in August.

The US dollar is regaining strength as markets price in an increased likelihood of a Federal Reserve rate increase in September, driven by inflation concerns tied to soaring energy costs. Ongoing US‑Iran tensions also boost the safe‑haven appeal of the greenback, adding downward pressure on the NZD/USD pair.

Nevertheless, downside momentum appears limited as many traders are reluctant to take aggressive positions ahead of the Reserve Bank of New Zealand’s policy meeting on Wednesday. Attention will then turn to the closely watched US nonfarm payrolls report on Friday. Geopolitical developments are expected to provide additional direction for the NZD/USD pair.

Technically, a break below the 100‑period simple moving average on the 4‑hour chart would likely be a catalyst for further selling. The MACD remains slightly below zero, and the RSI sits in the mid‑30s, together indicating that bullish momentum has waned following the recent rebound.

That said, the pair continues to hold above its 200‑period SMA at 0.5876, keeping the short‑term bias neutral while nearby supply limits upside moves. The rising trendline near 0.5900 continues to underpin price action, so a break below that level would warrant a bearish setup targeting the 200‑period SMA at 0.5876, where buying interest could protect the broader uptrend.

On the upside, initial resistance sits at the 100‑period SMA around 0.5915; a sustained move above this level would be required to restore a more constructive outlook for the NZD/USD pair.

NZD/USD 4-hour chart

Economic Indicator

RBNZ Interest Rate Decision

The Reserve Bank of New Zealand (RBNZ) announces its interest rate decision after each of its seven scheduled annual policy meetings. If the RBNZ is hawkish and sees inflationary pressures rising, it raises the Official Cash Rate (OCR) to bring inflation down. This is positive for the New Zealand Dollar (NZD) since higher interest rates attract more capital inflows. Likewise, if it reaches the view that inflation is too low it lowers the OCR, which tends to weaken NZD.

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