The New Zealand Dollar (NZD) might slowly decline, but it’s unlikely to fall below 0.5700. FX analysts from UOB Group note that the NZD is under some mild downward pressure and could test the 0.5700 mark. In the last 24 hours, it was expected that the NZD would decrease and reach 0.5720. This prediction came true, with a low of 0.5715 before closing at 0.5723, reflecting a 0.34% drop. There is some momentum suggesting it may drop further, but a fall below 0.5700 seems improbable. Resistance levels are set at 0.5740 and 0.5750.

One To Three Week Outlook

Looking ahead one to three weeks, the outlook remains unchanged since last Friday. There has been a slight increase in downward momentum, indicating that the NZD could move closer to 0.5700. If it breaks above the 0.5765 resistance level, it may signal reduced downward pressure. Previously, the strong resistance was at 0.5790. With the current mild downward pressure on the NZD/USD, we expect the pair to drift toward the 0.5700 support level in the coming weeks. A noticeable break below this support level seems unlikely based on the current trend. This suggests that while sentiment is negative, a major drop is not the most likely scenario. For traders, selling out-of-the-money put options with a strike price at or just below 0.5700 is an appealing strategy. This method collects a premium by betting that this strong support level will hold through the expiration of the options. If the pair stays above 0.5700, the options will expire worthless, allowing traders to retain the entire premium.

Impact Of Economic Data

This view is supported by recent economic data from New Zealand in October 2025, which shows inflation easing to 2.9%, moving closer to the Reserve Bank of New Zealand’s target range. While this lessens the need for further rate hikes and puts pressure on the kiwi, it does not indicate an economic crisis that would cause a sharp currency drop. The market expects a stable policy rate from the RBNZ into the first quarter of 2026. Adding to the gentle downward trend, the latest Global Dairy Trade auction in late October 2025 recorded a 1.8% price drop, continuing a trend of modest declines. Since dairy is a crucial export for New Zealand, this price softening contributes to bearish sentiment, though it is not alarming. Meanwhile, upcoming US jobs data this Friday is anticipated to show ongoing labor market strength, which could support the US dollar. Historically, the 0.5700 level has been a significant psychological and technical support for NZD/USD. For example, in the fourth quarter of 2023, this level provided strong support before a rebound. This historical context gives us more confidence that this level will be tough to break in the current market. Alternatively, traders could use a bear put spread. This involves buying a put option at a strike like 0.5750 and selling a put at 0.5700. This strategy would profit if the NZD/USD declines but limits the maximum profit if the price drops below 0.5700. It effectively bets on the expected downward movement while recognizing the strength of the support level. Create your live VT Markets account and start trading now.

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