New Zealand Dollar Under Pressure! Will the Decline Continue?

Figure: NZDUSD, H4, TradingView

The New Zealand dollar remains under pressure against the US dollar despite the Reserve Bank of New Zealand raising interest rates to 2.75%, as inflation remains elevated at 4.1% and the unemployment rate has risen to 5.6%, highlighting the ongoing challenges facing the New Zealand economy.

Meanwhile, attention is turning to the US Federal Reserve and its September 15–16 meeting. US interest rates currently stand within the 3.50%–3.75% range, amid a relative decline in expectations for another rate hike. As a result, US inflation data will be a key factor to watch. Softer inflation could reduce expectations of a rate hike and weigh on the US dollar, potentially supporting NZD/USD. On the other hand, an upside surprise in inflation could strengthen the dollar and put further pressure on the pair.

From a technical perspective, the New Zealand dollar against the US dollar (NZD/USD) remains within a bearish market structure, continuing to form lower highs and lower lows, as indicated by the red points on the chart.

Currently, the pair is trading within a range between 0.59117 and 0.58017. The 0.59117 level represents an important resistance level, with price remaining below it supporting the continuation of the bearish trend. However, a breakout above this level and the formation of a higher high on the four-hour timeframe could signal a shift in market structure from bearish to bullish.

On the other hand, the 0.58017 level represents a key support for the current trading range. A break below this level and the formation of a lower low could open the door for further declines and confirm the continuation of the bearish structure.