The NZDUSD currency pair has risen above its 100-day moving average of 0.59597. If it stays above this level, there’s a greater chance for it to move higher. Today, the NZDUSD is up by 0.54%. Factors like dollar selling, positive market sentiment, and breaking through technical resistance are driving this change. For two days, sellers tested this key level, but now the pair is trading at 0.59712.

Staying on an Upward Path

Staying above the moving average supports an upward trend, with the next target being August’s high around 0.6000. However, if it falls below the 100-day moving average, it could signal a downward shift. The NZDUSD’s rise back above its 100-day moving average is a key technical sign. We consider the 0.59597 level crucial for our short-term strategies. As long as the price remains above this level, the easiest path seems to be upwards. With this positive shift, we’re thinking about buying call options with a strike price near the 0.6000 mark. This action is backed by a general weakness in the US dollar after the August 2025 jobs report showed slower hiring and wage growth. The market now expects a higher chance of the Federal Reserve reducing rates before year-end, contributing to this dollar selling. Additionally, recent data showed China’s Caixin Manufacturing PMI for August unexpectedly climbed to 51.2. This suggests some stability in New Zealand’s largest trading partner, enhancing the outlook for New Zealand’s commodity exports and supporting our current positive market sentiment. This is a shift from early 2024, when concerns over China’s economy negatively impacted the kiwi.

Key Factors Influencing NZDUSD

The Reserve Bank of New Zealand is also supporting the currency. It kept its official cash rate steady in the last meeting due to persistent domestic inflation. This difference in policy compared to a more cautious Federal Reserve creates a favorable climate for NZDUSD. We believe this is a key fundamental driver, less visible during last year’s consolidation phases. However, we must be cautious about the risk of a false breakout, which we’ve seen in the past. If the price drops below the 100-day moving average at 0.59597, it would indicate that sellers have taken control. If that happens, we would look to buy put options to protect against a quick drop back toward the lower end of the recent trading range. This possibility of a reversal could lead to increased implied volatility on NZDUSD options, especially if the pair struggles to maintain its gains. If it decisively breaks and holds above 0.6000, it would likely reduce volatility and confirm a new uptrend. For now, the 100-day moving average remains the key level guiding our next moves. Create your live VT Markets account and start trading now.

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