The NZDUSD pair dipped slightly today, trading towards the lower part of an important range between 0.5882 and 0.5892. This range is just above the 38.2% retracement level of the rally from April to July, which is at 0.5877. The current price is 0.58975. The fact that the price hasn’t broken below the 38.2% retracement indicates some strength, as it remains near the lower end of this range that has held since early April. Sellers have had chances to push the price down but have not succeeded.

Buyers Need To Keep Up Their Strength

For buyers to take control, they need to keep the price above the 38.2% retracement and push past these key levels: 0.59375 (the swing area high from the last month), 0.5947 (the 100-day moving average), and 0.59576 (the declining 100-bar moving average on the 4-hour chart). If the price breaks above these levels, it would shift the focus towards the upper April range. Until that happens, support is holding, but buyers lack momentum. The 38.2% retracement is crucial for those betting on a weaker dollar, and if the price goes below it, buying efforts could weaken. As of August 5, 2025, the NZDUSD is testing an important support level. The price is around 0.5882 to 0.5892, just above the crucial support at 0.5877. Sellers have tried but failed to lower the price, indicating they might be losing momentum. This technical support is reinforced by recent news. The Reserve Bank of New Zealand kept interest rates steady at 5.5% in July, resisting expectations of a cut. Additionally, today’s Global Dairy Trade auction showed a surprising 2.1% increase in prices, which is a positive sign for New Zealand’s economy. These factors likely explain why buyers are strongly defending the 0.5877 level.

Market Conditions In The US

On the flip side, the US dollar is showing some weakness, as last month’s core inflation figures came in a bit lower than expected at 3.4%. This has led markets to think the Federal Reserve is likely to hold rates steady in the upcoming meeting. This uncertainty in the US is contributing to the current price consolidation. For traders who expect a price increase, buying call options with a strike price near 0.5950 could be a good strategy. This would allow participation in a potential rally if the price breaks through recent highs and the 100-day moving average. The main risk here is a close below 0.5877, which would indicate that the bullish outlook may not hold. On the other hand, traders who foresee a breakdown in this support might consider buying put options with a strike price around 0.5850. This position could profit from further declines and serve as a hedge against long positions. The trigger for this strategy is a decisive daily close below the 0.5877 support level. This kind of consolidation is familiar; we saw something similar in late 2023. During that time, the NZDUSD established a solid base around the 0.5800-0.5900 zone before starting a significant rally. While past performance doesn’t guarantee future results, this historical pattern serves as a helpful guide for the current situation. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now