NZD/USD struggles as fragile US-Iran peace talks keep markets cautious

• NZD/USD trades with a softer tone as investors remain cautious amid rapidly shifting headlines surrounding potential US-Iran peace negotiations.
• Initial optimism faded after reports indicated that Iran had rejected parts of the US-backed proposal to reopen the Strait of Hormuz.
• US Initial Jobless Claims rose to 200K but remained below expectations.

The NZD/USD pair is trading with a softer tone near the 0.5940 region on Friday, pressured by cautious market sentiment as investors continue tp react to rapidly changing headlines surrounding the potential peace agreement between the United States (US) and Iran.

Initial optimism supported risk-sensitive currencies after reports suggested both sides were moving toward a temporary framework that could reduce tensions in the Middle East and restore shipping through the Strait of Hormuz. Those developments initially weakened the US Dollar (USD) and improved overall market sentiment.

However, risk appetite later faded after reports indicated that key disagreements remain unresolved. Iran reportedly rejected parts of the US-backed reopening proposal for the Strait of Hormuz, reviving concerns about prolonged geopolitical instability and limiting upside momentum in currencies tied to global growth and risk sentiment, including the New Zealand Dollar (NZD).

Meanwhile, the USD remains supported by relatively resilient US labor-market data ahead of Friday’s Nonfarm Payrolls report. Initial Jobless Claims rose to 200K from 190K but still came in below market expectations near 206K, while Continuing Claims declined to 1.766 million, signaling that layoffs remain historically low despite some signs of moderation in economic activity. Falling Treasury yields have limited broader USD strength, but markets remain cautious ahead of key US employment data.

Short-term technical analysis:

On the four-hour chart, NZD/USD trades at 0.5941, holding a modest bullish bias as it remains above both the 20-period Simple Moving Average (SMA) at 0.5927 and the 100-period SMA at 0.5896. The pair is grinding higher after reclaiming nearby horizontal supports, while the Relative Strength Index around 54 hints at steady, rather than aggressive, upside momentum.

On the upside, immediate resistance emerges at 0.5954, followed by 0.5965 if buyers extend the move. On the downside, initial support is seen at 0.5940, ahead of 0.5935, with the 20-period SMA at 0.5927 and the 100-period SMA at 0.5896 reinforcing the broader constructive structure on deeper pullbacks.

(The technical analysis of this story was written with the help of an AI tool.)