NZD/USD is trading under pressure near the 0.5700 level as the US Dollar (USD) is supported by hawkish comments from Federal Reserve (Fed) Governor Christopher Waller and resilient United States (US) services data.
Waller said Fed policymakers remain committed to the 2% inflation target, calling it a credible pledge. He said the risks have “turned upside down” as the labor market appears stable while inflation is “going up and down”, which changes policymakers’ thinking about monetary policy.
The Fed official also stressed that the central bank will not keep rates low to help the US government finance its deficit. He said he would prefer to set the inflation target as a limit, but warned that changing the target at this point would not be credible.
US data also maintained support for the greenback. The ISM Services PMI declined to 54.0 in June, in line with expectations, while the employment index rose sharply to 51.2 from 47.9. However, new orders declined to 55.1, and prices paid fell to 67.7, suggesting that demand and cost pressures both eased but remained elevated.
Short-term technical analysis:
On the four-hour chart, NZD/USD trades at 0.5705. The pair holds a neutral-to-slightly-bullish tone as it traded above the 20-period simple moving average (SMA) at 0.5693, but remains limited by the 100-period SMA at 0.5717 overhead. This configuration suggests a consolidation bias within a shallow recovery phase, while the Relative Strength Index (RSI) around 58 indicates steady, but not overly extended, bullish momentum.
The New Zealand dollar saw a recovery in the US session after selling off overnight, although the pair remained lower overall on Monday.
At the top, initial resistance is aligned at the 100-period SMA near 0.5717, with broad bullish traction likely to face strong hurdles at 0.5907, followed by 0.5930 and 0.5965. On the downside, immediate support is seen at 0.5702, supported by a nearby band at 0.5697 and the 20-period SMA and horizontal levels clustered around 0.5693, ahead of the lower cushion at 0.5684.
(The technical analysis for this story was written with the help of AI tools. know more.)
