NZD/USD slid for a second consecutive session on Thursday, trading near a one-week low during the Asian session. The pair came under pressure following weaker-than-expected GDP data from New Zealand and a recovering US Dollar (USD) after the Federal Reserve’s recent policy move. Bears are now eyeing a sustained break below 0.5900 before committing to fresh downside positions.
Weaker-than-expected New Zealand GDP fuels downside
Statistics New Zealand reported that the economy contracted by 0.9% quarter-on-quarter in Q2, reversing a 0.8% rise in Q1 and missing the consensus estimate for a 0.3% decline. The disappointing print has lifted expectations for further rate cuts from the Reserve Bank of New Zealand (RBNZ), weighing heavily on the Kiwi. Meanwhile, the USD seeks to build on post-FOMC gains from multi-year lows, adding to NZD/USD selling pressure.
Technical outlook favors bears
A break below the 0.5930–0.5925 zone, which corresponds to the 38.2% Fibonacci retracement of the recent recovery from August’s four-month low, supports further downside. Daily chart oscillators are beginning to tilt negative, reinforcing the bearish case.
If NZD/USD breaches the 0.5900 area—anchored by the 200-period 4-hour SMA and the 50% Fibonacci level—the pair could extend losses toward 0.5875, coinciding with the 61.8% Fibonacci retracement. Further declines may test 0.5835 before reaching the 0.5800 round number and the August swing low. A break below 0.5800 could trigger additional near-term selling.
Key levels on the upside
On the upside, immediate resistance now stands at 0.5935 (38.2% Fibonacci), followed by 0.5960. A sustained recovery above 0.5960 could allow NZD/USD to retest the 0.6000 psychological level, with potential gains toward 0.6045 and 0.6100. The year-to-date high near 0.6120, reached in July, remains the next major upside target.
