- NZD/USD has stretched its recovery above 0.6060 amid a sheer sell-off in the USD Index.
- An increase in $31.4 trillion US borrowing limit is expected to attract downgrades from credit rating firms for US long-term sovereignty.
- NZD/USD has shown a responsive buying move after dropping below 0.6040 but is likely to face stiff barricades around 0.6110.
The NZD/USD pair has extended its recovery above 0.6060 in the Asian session. The Kiwi asset is expected to stretch its rebound move further as the approval for the US debt-ceiling raise has weighed heavily on the US Dollar Index (DXY).
Gains in the S&P500 futures have trimmed sharply after the approval of the raise in the US debt-ceiling. An increase in the $31.4 trillion US borrowing limit is expected to attract downgrades from credit rating firms for US long-term sovereignty. This will weigh heavily on the US Dollar Index and US equities ahead.
On a broader note, the New Zealand Dollar remained under pressure despite the Reserve Bank of New Zealand (RBNZ) hiked interest rates by 25 basis points (bps) last week to 5.50%. RBNZ Assistant Governor Karen Silk warned that the central bank must be watchful of over-tightening policy and that it can hold now and sees what develops.
NZD/USD has shown a responsive buying move after dropping below 0.6040 on a two-hour scale. The recovery move by the Kiwi asset has to pass through plenty of filters to build a bullish impression. The recovery move in the Kiwi asset is expected to face stiff barricades around the horizontal resistance plotted from April 26 low at 0.6110.
The 20-period Exponential Moving Average (EMA) at 0.6067 is still acting as a barricade for the New Zealand Dollar bulls.
Meanwhile, the Relative Strength Index (RSI) (14) has attempted a range shift into the 40.00-60.00 territory from the bearish range of 20.00-40.00, which indicates a loss in the downside momentum.
Further extension in recovery above April 26 low at 0.6110 will push the Kiwi asset toward April 27 high at 0.6162 followed by May 12 low at 0.6182.
On the contrary, a downside move below May 26 low at 0.6032 will expose the asset to a fresh six-month low toward the psychological support of 0.6000. A slippage below the latter will further drag the asset toward 11 November 2022 low at 0.5984.
NZD/USD two-hour chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays pressured toward 1.0800 amid fresh US Dollar demand
EUR/USD is posting small losses, directed toward 1.0800 in Friday’s European trading. The pair is undermined by a renewed US Dollar buying and investors'' caution ahead of German parliamnet's Upper House vote on the spending plan, Trump and Fed-speak.
GBP/USD holds losses below 1.2950 on sustained US Dollar strength
GBP/USD keeps the red below 1.2950 in the early European session on Friday. Resurgent US Dollar demand amid cautious Fed and economic uncertinaties remain a drag on the pair, despite the BoE's hawkish hold decision. The focus shifts to the Fedspeak and US President Trump's Oval address.
Gold price hangs near multi-day low on stronger USD; bears lack conviction amid trade jitters
Gold price continues losing ground for the second straight day on Friday, though it managed to rebound slightly from the $3,020 area during the early European session. The Federal Reserve's forecast for only two 25 basis points (bps) rate cuts by the end of this year assists the US Dollar in gaining positive traction for the third successive day
Bitcoin, Ethereum and Ripple stabilize as SEC Crypto Task Force prepares for First roundtable discussion
Bitcoin price hovers around $84,500 on Friday after recovering nearly 3% so far this week. Ethereum and Ripple find support around their key levels, suggesting a recovery on their cards.
Tariff wars are stories that usually end badly
In a 1933 article on national self-sufficiency1, British economist John Maynard Keynes advised “those who seek to disembarrass a country from its entanglements” to be “very slow and wary” and illustrated his point with the following image: “It should not be a matter of tearing up roots but of slowly training a plant to grow in a different direction”.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.