FX.co ★ UFCworriers | NZD/USD

Fundamental Analysis NZD/USD suffers another consecutive day's worth of losses, with the currency trading at 0.5964 amid European trading on Tuesday. There is bearish sentiment for the currency pair as the US dollar (USD) gains value due to a safe-haven effect driven by escalating geopolitical tensions. Indeed, there have been increasing pressures on Iran from the US government, both economically and in its dealings with international partners. The Treasury Secretary, Scott Bessent, described a tough policy approach aimed at isolating Iran from the global economy. In this regard, the US Treasury is planning to introduce sanctions against countries that continue to do business with Iran. Moreover, US President Donald Trump said that foreign companies have very little time either to terminate economic relations with Tehran or to pay for such an approach through sanctions imposed solely by the United States. However, despite the tough approach, the market participants are skeptical about the results of this tough strategy. There is doubt as to whether it will help to come to some sort of agreement. Nevertheless, future upside in the Greenback may be limited by the US Treasury's move to double down on its bond-buying operations for the longer end of the curve. There have been reports that Secretary Bessent may tap up to $1 trillion in funds from the Treasury General Account to execute this repurchase, which could lead to changes in market liquidity and yields. Nonetheless, downside risk in the NZD/USD currency pair may be limited by the anticipation of higher interest rate moves in September. Technical Analysis The NZD/USD remains technically positive on the four-hour chart; however, the most recent retracement suggests that buyers have lost some immediate strength near the top boundary of the rising channel. The price recently touched the 0.59800 level before pulling back towards 0.59500. Buyers are favored as long as the pair remains above the rising lower trendline, with initial resistance near 0.59635 and major resistance at the 0.59800-0.59900 region. The rising channel continues to dominate the price structure. The bottom line continues to support the price at 0.59430, with deep support at 0.59220 and 0.59085. Any successful test of 0.59430 might result in a further test of 0.59635. The crossing of 0.59635 on the 4-hour chart would boost the bullish bias and pave the way for a move towards 0.59800 and further towards the round figure of 0.60000. The Ichimoku Cloud still underpins the positive bias. The price is above the cloud and the forward cloud has a bullish bias and is rising, implying trend support. Thus, the cloud, along with the related lines between 0.59220 and 0.59320, can provide a cushion against corrections as long as the price remains above this region. Indicators continue to give mixed signals but remain relatively positive. The RSI is at 57.97 and is above the 50 neutral level, signaling the buyer’s advantage without being overbought. The MACD is positive; however, its histogram and signal line are slowing down, implying that upward momentum is fading. Momentum oscillators are rather neutral, although quite positive overall. RSI stands at 57.97 and holds above the neutral value of 50, implying that buyers have a dominant position but there are no signs of overbought situation yet. MACD still shows a positive reading, but its histogram and signal line are slowing, indicating that bullish momentum is losing strength. Stochastic bounced from oversold territory, indicating potential for continued buying if price consolidates. In general, NZD/USD still maintains a bullish formation above 0.59430 and the bottom line of the ascending channel. The critical resistance is at 0.59635, with further upside targets at 0.59800 and 0.60000. Breaking below 0.59220 would undermine the bullish setup and change focus to 0.59085.