The New Zealand Dollar (NZD) may continue to decline. The key support level to monitor is 0.5730, and the overall outlook remains negative. Recently, the NZD dropped to 0.5759, falling below important support levels. Although there are signs of further declines, it is uncertain if the NZD will break below 0.5730 due to oversold conditions.

Consistent Weakness in NZD

As expected, the NZD has been on a downward trend since last week. A key resistance level remains at 0.5830, unchanged from yesterday. Please note that this information contains forward-looking statements, and there are inherent risks. This does not serve as trading or investment advice. It is essential to conduct thorough research. Errors and omissions may occur, and any investment risks, including emotional stress and financial losses, are the individual’s responsibility. The author holds no compensated positions. FXStreet and the author do not promote specific investments and disclaim liability for any inaccuracies or losses.

Investment Disclaimer

FXStreet and the author do not act as registered investment advisors. This content is not intended as investment advice. The New Zealand Dollar has weakened significantly, dropping below the 0.5800 support level to a low of 0.5759. The strong downward momentum suggests it may test the next major support at 0.5730 soon. The outlook remains negative as long as the price is below the strong resistance at 0.5830. This negative perspective is supported by recent economic data from September 2025, which revealed that New Zealand’s GDP growth was just 0.2% for the second quarter, falling short of expectations. Many believe that the Reserve Bank of New Zealand may need to consider interest rate cuts early in 2026, causing a divergence from the still-hawkish US Federal Reserve. Currently, interest rate futures suggest a nearly 40% chance of an RBNZ rate cut in the first quarter of next year. For traders dealing in derivatives, this scenario suggests preparing for more declines or volatility. Buying NZD/USD put options with strike prices at or below 0.5730 may be a way to profit from a potential drop. Alternatively, selling call option spreads with a short leg above the 0.5830 resistance could be beneficial if the currency remains capped. Additional pressure comes from the global economy, as China’s recent industrial production figures were also disappointing. As New Zealand’s largest trading partner, any slowdown in China directly affects demand for Kiwi exports such as dairy and lumber. The latest Global Dairy Trade auction two weeks ago showed whole milk powder prices dropped by another 1.8%. We have seen similar price movements before, especially during the slowdown fears in the third quarter of 2022, when the NZD/USD pair traded within the same range. While the currency is currently deeply oversold, which could lead to a brief recovery, the underlying fundamentals favor further weakness. Traders should keep an eye on the 0.5800 level; failing to rise above it will confirm the bearish trend. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now