Fading Bearish Pressure Near Structural Support Favors Renewed NZDUSD Rally

Manuel

Forex

Economic

Summary:

This developing bullish divergence suggests a notable exhaustion in selling pressure.

BUY NZDUSD

EXP

PENDING

0.59300

Entry Price

0.60850

0.58600

0.59744 +0.00023 +0.04%

Pips

PENDING

0.58600

Exit Price

0.59300

Entry Price

0.60850

The Reserve Bank of New Zealand (RBNZ) elected to maintain the Official Cash Rate (OCR) at 2.25% during its February policy deliberations on Wednesday. While the central bank reiterated an accommodative outlook—predicated on expectations that inflation will revert to its target within the next calendar year—market participants were quick to push back on the timing of future tightening. Consequently, traders have now pushed the likely window for a rate hike beyond the end of 2026.

However, the narrative shifted toward a more hawkish tone on Thursday following comments from the new RBNZ Governor, Anna Breman. She indicated that the bank stands ready to tighten policy prematurely should price behaviors shift or if a robust economic recovery validates higher borrowing costs. This hawkish lean, coupled with sustained optimism in global equity markets, has provided a necessary cushion for the New Zealand Dollar (NZD). Supporting this sentiment, RBNZ official Silk remarked in a recent interview that the next interest rate adjustment is "likely to be upward," citing persistent upside inflationary risks and consumer demand uncertainty. Market pricing has since moderated, now reflecting a 75% probability of a hike by October, a slight retreat from the 90% seen prior to the meeting.

Across the Pacific, the U.S. labor market continues to demonstrate remarkable structural resilience. Initial jobless claims fell to 206,000 for the week ending February 14—a figure significantly lower than the 225,000 consensus estimate. According to the Department of Labor (DOL), the four-week moving average also edged lower to 219,000, reinforcing a stabilizing trend despite a marginal increase in continuing claims to 1.869 million.

This data adds layers of complexity to the Federal Reserve’s current posture. Rhetoric within the Fed remains sharply divided: San Francisco Fed President Mary Daly maintains a hawkish stance, arguing that inflation remains uncomfortably high. Conversely, Governor Michael Barr advocates for a patient approach, suggesting that borrowing costs should remain elevated until definitive evidence of a move toward the 2% target emerges. Meanwhile, Chicago Fed President Austan Goolsbee acknowledged inflationary progress but cautioned that a "neutral-loose" policy stance could emerge if price levels remain sticky, framing a 3% rate as a potential benchmark for neutral policy. Fading Bearish Pressure Near Structural Support Favors Renewed NZDUSD Rally_1

Fading Bearish Pressure Near Structural Support Favors Renewed NZDUSD Rally_1

Technical Analysis

From a technical perspective, NZD/USD is currently navigating a corrective phase that originated from the 0.6092 peak reached on January 29. Despite the intensity of the broader bullish impulse, the pair is once again approaching the critical local low of 0.5929 established on February 5.

A bullish reaction from this specific demand zone could ignite a significant upward move. Critically, the 200-period Moving Average on the 4-hour chart is currently situated at 0.5890, serving as a major dynamic support floor. Meanwhile, the 100-period MA sits overhead at 0.6007, acting as a primary objective for the bulls once momentum shifts.

Our analysis of momentum oscillators reinforces the potential for a reversal. The Relative Strength Index (RSI) recently touched the 31.55 level—a reading lower than the one recorded on February 5, despite the price remaining above those previous lows. This developing bullish divergence suggests a notable exhaustion in selling pressure. Simultaneously, while the MACD histogram remains in negative territory, the bars are beginning to contract significantly. Provided the price action respects the 200-period MA, the technical bias favors a resumption of the primary bullish trend. However, a failure to hold this zone would invalidate the setup and likely open the door for a deeper structural correction.

Trading Recommendations

Trading direction: Buy

Entry price: 0.5930

Target price: 0.6085

Stop loss: 0.5860

Validity: Mar 04, 2026 15:00:00

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Fading Bearish Pressure Near Structural Support Favors Renewed NZDUSD Rally

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