The US dollar has weakened broadly following recent developments, including softer-than-expected ADP employment data and a Bloomberg report indicating that Kevin Hassett has emerged as the frontrunner for the Federal Reserve Chair position. This downward pressure on the greenback had already begun after New York Fed President John Williams endorsed the possibility of a rate cut in December.

The market now prices in a 76% chance of a December rate cut, making such a move appear highly likely. With limited significant economic data expected ahead of the Federal Open Market Committee (FOMC) meeting, traders will focus primarily on jobless claims and forthcoming ADP figures. So far, these indicators have not demonstrated meaningful improvement. Should the data remain weak, this will likely continue to weigh on the US dollar, while stronger numbers might provide temporary support. Ultimately, however, the main market drivers will be the FOMC decision itself, followed by the Non-Farm Payrolls (NFP) and Consumer Price Index (CPI) reports.

Turning to the New Zealand dollar, the Reserve Bank of New Zealand (RBNZ) recently cut the Official Cash Rate (OCR) to 2.25% as expected, signalling an end to the easing cycle. The central bank stated that the OCR is expected to remain at this level through 2026. This guidance gave the NZD a boost as the market reassessed and priced out the possibility of further easing in 2026.

Looking at NZD/USD technicals on the daily timeframe, the pair has rebounded strongly from recent lows due to dovish bets on the Fed and the RBNZ decision. A downward trendline currently acts as resistance. Sellers are likely to use this trendline as a point to position for a decline towards the April lows, with a clearly defined stop above the trendline. Buyers, however, will look for a break above this resistance to extend bullish positions toward the next resistance level near 0.5850.

On the 4-hour chart, a strong support zone is visible around 0.5690. If there is a pullback, buyers may step in at this level, placing stop-loss orders just below the support to target a break above the downward trendline. Sellers will watch for a break below this support zone to increase bearish positions toward new lows.

The 1-hour chart offers limited additional insight. Generally, buyers will look for bounces off the support zone, while sellers aim for breaks below it. The red lines on this timeframe define the average daily trading range for the day, helping traders manage risk accordingly.

Original Source: Giuseppe Dellamotta of investinglive.com