The NZDUSD currency pair has hit a new low for both today and the current trading week. This drop came after positive PPI data was released. The pair fell below several key levels: the 100-day moving average of 0.5969, the 100-bar moving average on the 4-hour chart at 0.5952, and the weekly low of 0.5912. The lowest point during the session was 0.59075. Possible downside targets include the 0.59039 low from July 17, and the swing lows of 0.5882 from June 23 and August 5. Additionally, the 38.2% retracement from the April rally stands at 0.58769. Another important swing zone is between 0.5845 and 0.5860.

Buyers Regaining Control

For buyers to take control, the pair needs to rise above 0.5937 and the 100-bar moving average at 0.59524. Until that happens, sellers will continue to lead. With the NZDUSD falling below the crucial 100-day moving average at 0.5969, we are exploring strategies that could profit from further declines. This significant move suggests that buying put options with strike prices around the 0.5900 mark is a clear way to prepare for a drop toward the identified swing areas. This break is an important technical sign that sellers are currently in charge. The bearish trend is backed by fundamental data. Yesterday, the US Producer Price Index for July 2025 unexpectedly rose to 0.4%, raising expectations that the Federal Reserve will keep interest rates steady for the rest of the year. As a result, the US dollar is gaining strength across the board. This is a stark contrast to the Reserve Bank of New Zealand, which is likely to start easing monetary policy before 2026. Further pressuring the Kiwi, global dairy prices have declined for the fourth consecutive auction, with the Global Dairy Trade index dropping nearly 12% since June 2025. Fonterra’s recent cut in its milk solids payout forecast is adversely affecting New Zealand’s trade terms. This weakness in New Zealand’s main export poses a considerable challenge for the currency.

Historical Patterns

We’ve observed this pattern before in the second half of 2023. Back then, a combination of a hawkish Fed and falling dairy prices caused the NZDUSD to drop from above 0.6200 to near 0.5700. The current situation is showing a similar disconnect in monetary policy and commodity trends. Therefore, we see any short-term rallies back toward the 0.5950 area as opportunities to start or add to bearish positions. With the break of key support levels, we can expect increased volatility in the coming weeks. Traders are using bear put spreads to target the 0.5845–0.5860 swing area, which minimizes upfront costs while outlining the potential risks and rewards. This strategy enables a focused approach on the next downward movement without full exposure to a sudden reversal. Create your live VT Markets account and start trading now.

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