The New Zealand Dollar (NZD) is likely to test the 0.5710 level, but reaching the main support at 0.5690 seems unlikely because it is currently oversold. Analysts at UOB Group believe the long-term outlook for the NZD has become negative, with 0.5690 being a crucial level to watch. In the short-term, after a drop to 0.5717, further declines are expected, but they probably won’t hit the 0.5690 support. Current resistance levels are at 0.5735 and 0.5760. Looking ahead one to three weeks, the negative outlook that began on October 8 continues, with strong resistance at 0.5780. If this level is broken, the next support below 0.5690 is at 0.5660.

Market Insights

This information comes from the FXStreet Insights Team, which gathers opinions from market experts and other analysts. We believe the NZD’s outlook has turned negative, indicating a potential move towards 0.5690. For derivative traders, this may mean purchasing put options with strike prices around 0.5700 or lower. These options could be profitable if the currency continues to decline in the coming weeks. This negative sentiment is backed by recent data showing New Zealand’s inflation decreased to 2.8% in the third quarter of 2025, easing the pressure on the RBNZ to raise interest rates. Meanwhile, a strong US jobs report from September 2025 continues to support the US dollar. Additionally, the recent 3.2% drop in global dairy prices on October 7 adds more weight to the NZD’s bearish outlook.

Economic Strength and Currency Outlook

While the downward trend is strong, we should be mindful of the current oversold conditions, which might lead to a temporary rebound. It might be wise to wait for a small rally towards the 0.5760 resistance level before entering new short positions. Our negative outlook remains valid as long as the price stays below the important resistance level of 0.5780, which is a good point for setting stop-loss orders. This situation reminds us of the third quarter of 2023, when a similar gap between economic strength and central bank policy caused the pair to drop sharply. If the key support at 0.5690 breaks, we will be looking for a further decline towards the next target at 0.5660. The ongoing strength of the US dollar remains the main driving force behind this downward trend. Create your live VT Markets account and start trading now.

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