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    New Zealand dollar shows recovery, closing above 0.5750 and indicating bullish momentum after recent losses

    by VT Markets
    /
    Oct 9, 2025

    Technical Outlook for NZD/USD

    The technical outlook indicates a bottoming pattern after reaching multi-month lows. If NZD/USD goes above 0.5800, we could see gains. Key targets above this level are the 50-day SMA at 0.5881 and the 100-day SMA at 0.5944. If the pair stays below 0.5800, the first support level is at 0.5737, with further support at 0.5700. If the downward trend continues, we might test the yearly low of 0.5485 set in April. This week, the New Zealand Dollar gained strength against the Japanese Yen, which is reflected in the percentage changes against major currencies. The heat map shows these changes clearly. After bouncing back from 0.5737, NZD/USD may be forming a bullish reversal. Our immediate focus is how the pair reacts to the resistance at 0.5800. A strong break above this level would encourage us to consider short-term bullish positions.

    Option Strategies for Different Scenarios

    Traders expecting a rise may want to buy call options with a strike price close to 0.5850. This strategy could help capture potential gains toward the 200-day moving average. Notably, New Zealand’s inflation has remained stubbornly above 3% for most of 2024, keeping the Reserve Bank of New Zealand cautious. If risk sentiment improves, this could strengthen the Kiwi dollar. On the other hand, if the pair fails to stay above 0.5800, we need to prepare for a bearish shift. Buying put options with a strike price around 0.5700 would allow us to profit from a drop towards the April 2025 lows. This outlook aligns with the uneven economic recovery data from China, New Zealand’s largest trading partner, which may pressure the NZD. To manage risk, we can use option spreads since currency market volatility has been significant, similar to sharp changes in late 2023. A bull call spread can help us target the upside while limiting risk and lowering costs. Meanwhile, a bear put spread can be used to prepare for a potential drop below recent support levels. Create your live VT Markets account and start trading now.

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