NZD/USD is hitting resistance around 0.5800 due to positive economic news from New Zealand. The ANZ business outlook survey shows that business confidence has risen to 58.1, the highest in eight months, up from September’s 49.6. There is also an increase in expected own activity, which is now at a six-month high of 44.6%. However, the Reserve Bank of New Zealand (RBNZ) is predicted to reduce its policy next month. The RBNZ is likely to cut interest rates by 25 basis points to 2.25% on November 26, with a 90% chance of this happening. This decision aligns with inflation being within the RBNZ’s target range. However, global economic trends may lessen the impact of these policy changes on the NZD. The upcoming RBNZ announcement should clarify these expectations further.

Key Resistance at 0.5800 Level

The NZD/USD is nearing the significant resistance level of 0.5800, backed by some positive local business news. Yet, attention remains on the anticipated interest rate cut from the RBNZ. With a 90% likelihood of a cut expected on November 26, this rally could present a good chance to prepare for a decline. The case for a weaker Kiwi is strengthened by the recent Q3 2025 inflation rate of 2.1%, which offers the RBNZ strong grounds to ease its policy. In contrast, the U.S. has seen solid payroll numbers that support the Federal Reserve’s decision to maintain its rates. This growing policy difference between the two banks tends to put downward pressure on the NZD/USD exchange rate. For those trading derivatives, there are clear opportunities for bearish strategies heading into the RBNZ meeting. One effective method could be selling call options with a strike price at or just above 0.5800, betting on this resistance level holding firm. Alternatively, buying put options could help profit from a decline if the pair falls after the rate cut announcement.

Historical Context and Future Outlook

Looking back to the RBNZ’s easing cycle in 2019 illustrates how a shift to a dovish policy can lead to prolonged weakness for the currency. The 0.5800 level has previously served as a major technical barrier during late 2023’s market fluctuations, often halting rallies. This suggests that the current strength could be short-lived. Nevertheless, we shouldn’t overlook the support from resilient global economic activity, which is helping counteract the RBNZ’s influence. Recent manufacturing PMI data from China, New Zealand’s largest trade partner, indicated unexpected growth. This might explain the current strength of the Kiwi, providing better entry points for bearish positions. Create your live VT Markets account and start trading now.

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