NZD/USD Price Forecast: Kiwi holds gains with bulls aiming for the 0.5690 area

• NZD/USD holds recent gains around 0.5660, close to late September highs around 0.5690.
• Upbeat data from China has offset weak Trade Balance data from New Zealand.
• The US Dollar remains on the defensive with investors bracing for a Fed pause in October.

The New Zealand Dollar (NZD) stands its ground against the US Dollar (USD) at the start of the week, as positive data from China offset the downbeat New Zealand Trade Balance earlier in the day. The NZD/USD pair maintains its immediate bullish trend, trading at 0.5660, just below three-week highs and with bulls looking at the late September highs at 0.5990.

Data from China, New Zealand’s main trading partner, revealed that the country’s Gross Domestic Product (GDP) grew at a 4.5% pace in the third quarter, beyond the second quarter’s 4.3% growth and beating expectations of a 4.4% increase. Beyond that, Retail Sales rose 1.1% in September, more than twice the market consensus, easing concerns about the country’s weak domestic demand.

In New Zealand, on the contrary, the trade deficit widened to NZD 1.97 billion in September, from NZD 1.54 billion in August. Also on Monday, the NZ Business PSI, a gauge measuring the services sector’s performance, showed a moderate slowdown, to 50.9 in September from a downwardly revised 51 in the previous month, with businesses showing concern about political uncertainty ahead of the elections and the higher cost of living.

The US Dollar has opened the week in the same bearish trend seen in the previous one. US inflation figures revealed that prices remain well above the Federal Reserve's (Fed) target. Central bank policymakers, however, requested some more time to assess the impact of September's rate hike, which hints at a pause in the October 29-29 monetary policy meeting.

Technical Analysis: Bulls remain in control while above 0.5930

NZD/USD trades at 0.5659, holding a constructive near-term bullish bias as it consolidates above previous highs in the 0.5630-0.5640 area. Momentum conditions favor the upside, with the Relative Strength Index hovering in the low 60s and the Moving Average Convergence Divergence (MACD) line holding in positive territory, which together suggest buyers retain control.

The immediate target is the September 24 and 28 top at 0.5660. Further up, the September 22 high, at the 0,5750 area, would come into focus. On the downside, a bearish reversal below the 1.5130 area (October 6, 14 and 15 highs) would increase pressure towards last week's lows at the 0.5590 and 0.5565 areas.

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