The NZD/USD currency pair traded marginally under pressure around 0.5935 during the late Asian trading session on Thursday, reflecting subdued market sentiment as investors awaited the outcome of a meeting between US President Donald Trump and Chinese leader Xi Jinping [1]. The pair struggled to sustain above the 61.8% Fibonacci retracement level at approximately 0.5940, with technical analysis indicating mild bullish bias as NZD/USD remained above the 20-day Exponential Moving Average (EMA) at 0.5909 and the 50.0% Fibonacci retracement at 0.5890 [1].
Asian stock markets were mostly down, with the Nikkei 225 falling 0.3% to near 63,070, while the US Dollar Index (DXY) traded firmly near 98.50, close to its weekly high of 98.60 posted on Wednesday [1]. The outcome of the Trump-Xi meeting is expected to have a significant impact on the New Zealand Dollar, given New Zealand's status as a key trading partner of China [1].
In the United States, rising inflationary pressures due to elevated energy prices have increased expectations of a Federal Reserve interest rate hike this year. According to the CME FedWatch tool, the probability of the Fed delivering at least one interest rate hike in 2024 is 32.2%, compared to almost nil a month ago [1].
Technical indicators show that the Relative Strength Index (14) is around 55, suggesting constructive but not overstretched momentum. Immediate resistance for NZD/USD is at the 61.8% Fibonacci retracement (0.5939), followed by the 78.6% level (0.6008) and the recent swing high at the 100.0% retracement (0.6095). On the downside, support is seen at the 20-day EMA (0.5909), the 50.0% retracement (0.5890), and further at the 38.2% (0.5842) and 23.6% (0.5782) retracement levels, with 0.5686 as a more distant structural floor [1].
CONCLUSION
NZD/USD remains under slight pressure amid cautious market sentiment, with investors closely watching the Trump-Xi meeting and Fed rate hike expectations. Technical levels suggest the pair is supported above key moving averages, but resistance remains near 0.5940. The market's direction will likely depend on upcoming geopolitical and monetary policy developments.