The NZDUSD dropped further last week, falling below its rising 100-day moving average at 0.59455. In July, it tried to break through this level on the 16th and 17th but quickly bounced back. Now, staying below the 100-day MA is crucial for sellers wanting to stay in control. If the price rises above this average, bearish momentum could fade, leading to a possible shift toward a bullish trend.

Downside Potential

On the downside, last Friday saw a low that tested the upper boundary of an important swing zone between 0.5845 and 0.5860. This zone has acted as a crucial support level since April. If the price clearly breaks below this area, it will reinforce a bearish outlook and may head towards the 200-day moving average at 0.58147. This point is vital for bears looking to increase their momentum. Key technical levels to note are resistance at the 100-day MA of 0.59455, support at the swing zone of 0.5845–0.5860, and a target below at the 200-day MA of 0.58147. As of today, August 4, 2025, we are closely monitoring the NZDUSD after it fell below its 100-day moving average at 0.59455 last week. Unlike the quick reversals in July, this decline seems more significant. This drop is backed by economic data showing that New Zealand’s GDP growth slowed to just 0.2% in the second quarter, which weakens the argument for the Reserve Bank of New Zealand to keep interest rates high.

Bearish Strategies

Given this technical weakness, traders should think about bearish strategies in the upcoming weeks. As long as the price stays below the 100-day moving average, it might be a good time to hold or initiate short positions. A smart risk management approach would involve setting stop-loss orders just above 0.59455 to guard against sudden reversals. We need to keep an eye on the support zone between 0.5845 and 0.5860. This level has held strong as a market floor since April. The US dollar is also gaining strength, bolstered by last week’s non-farm payroll report, which unexpectedly added 215,000 jobs, supporting the Federal Reserve’s cautious approach to interest rates. A strong break below the 0.5845 support would signal that the bearish trend is picking up speed. Such a move would strengthen our belief that sellers are taking control of the market. Historically, when major support levels like this fail, it often leads to quick selling momentum. If this support level breaks, the next target would be the 200-day moving average, currently around 0.58147. For derivative traders, falling below 0.5845 could trigger buying put options with a strike price near the 200-day MA. Reaching this level would confirm that a larger downtrend is in effect. Create your live VT Markets account and start trading now.

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