- NZD/USD hits a two-week high near 0.5700, driven by US Dollar weakness.
- The positive market sentiment, following a delay in Trump’s reciprocal tariff plans, reduces the USD's safe-haven demand.
- The Reserve Bank of New Zealand (RBNZ) is anticipated to lower its Official Cash Rate (OCR) by 50 basis points to 3.75% on Wednesday.
The NZD/USD pair reaches a fresh over two-week high near 0.5700, as the US Dollar (USD) underperforms amid a positive market sentiment. The demand for risk-sensitive assets rises with fears of an immediate global trade war fading after the unexpected delay in President Trump's reciprocal tariff plans. Despite Trump's initial tweet suggesting immediate tariffs, he directed his team to develop the plan further, diminishing the USD's safe-haven appeal. As a result, the US Dollar Index (DXY) revisits a four-week low around 106.80.
Investors now focus on the Reserve Bank of New Zealand's (RBNZ) monetary policy meeting on Wednesday, where expectations of a 50 basis point (bps) rate cut could weigh on the New Zealand Dollar (NZD).
The NZD/USD pair has rebounded strongly from the support zone near 0.5500 on a weekly timeframe, but the overall outlook remains bearish. The 20-week Exponential Moving Average (EMA) near 0.5777 is trending downward, and the 14-week Relative Strength Index (RSI) is struggling to return to the 40.00-60.00 range. A failure to do so may trigger fresh bearish momentum.
If the pair breaks below the 13-year low of 0.5470, it could decline further towards round-level supports at 0.5400 and 0.5300. However, a decisive break above the November 29 high of 0.5930 could drive the pair towards the November 15 high of 0.5970 and the psychological resistance level of 0.6000.
NZD/USD weekly chart
