New Zealand Dollar extends rally as fading Fed-hike bets soften US Dollar

• NZD/USD is up for the week and trading near a three-month high.
• Soft US data has trimmed bets on a Federal Reserve hike, pulling the US Dollar and Treasury yields lower.
• Sunday's New Zealand Retail Sales report is the next test.

The New Zealand Dollar (NZD) extends its rally against the US Dollar (USD) on Friday, trading near 0.6000 and close to its highest level since end-May.

Flash S&P Global PMIs released on Friday showed private-sector activity accelerating, led by a strong Services reading that beat expectations, though Manufacturing slipped and missed forecasts. Yet the upbeat data failed to lift the US Dollar, suggesting the Kiwi’s advance is being driven by its own momentum rather than a Federal Reserve (Fed) rethink.

China left its benchmark lending rates unchanged, offering some reassurance for currencies exposed to Chinese demand, including the Kiwi. Metals are strongly bid, with Gold and Silver both sharply higher on the day, and the Australian Dollar is set for its longest weekly winning streak since 2020. That risk-on tone tends to lift higher-beta currencies like the New Zealand Dollar, and the Kiwi is riding it.

The 0.6000 area is the immediate barrier, with the 2026 high a little above it. A failure to hold the 0.5900 region would take the wind out of the current push. After a run this steep, the pair needs a fresh reason to clear the round number rather than stall beneath it.

Short-term technical analysis:

In the daily chart, NZD/USD trades at 0.5979, retaining a bullish near-term bias as price holds above both the 20-day and 100-day simple moving averages (SMAs) at 0.5876 and 0.5837, respectively. The pair is pressing against nearby overhead supply, with initial resistance emerging at the horizontal barrier around 0.5989, while the Relative Strength Index (14) hovers near 69, suggesting momentum is strong but verging on overbought conditions.

On the downside, immediate support is seen at the clustered horizontal levels around 0.5939, 0.5930 and 0.5907, which protect the recent advance before deeper demand appears at the 20-day SMA near 0.5876 and the 100-day SMA at 0.5837. On the topside, a clear break above 0.5989 would open the door for further gains, although more distant resistance is only indicated far higher at 5,954, leaving the focus on how price reacts to the current cap just shy of the 0.6000 handle.

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