NZD/USD gains as weaker US Dollar offsets cautious US-Iran headlines

• The US Dollar weakens amid uncertainty surrounding the Fed’s leadership transition.
• US President Donald Trump will swear in Kevin Warsh as the next Fed Chairman on Friday, May 22.
• Mixed headlines surrounding US-Iran negotiations continue to support a cautious risk appetite and demand for risk-sensitive currencies.

The NZD/USD starts the session near the 0.5880 region on Tuesday as the US Dollar (USD) weakens amid shifting Federal Reserve (Fed) expectations and mixed developments surrounding negotiations between the US and Iran.

A White House official stated that United States (US) President Donald Trump will swear in Kevin Warsh as the next Fed Chairman on Friday, May 22, after the Senate approved his nomination to replace the current temporary Fed Chairman, Jerome Powell, for a four-year term. The leadership transition increased uncertainty regarding the future direction of US monetary policy, pressuring the Greenback.

Meanwhile, headlines surrounding the US-Iran conflict continued driving market sentiment. Axios reported that Iran’s latest proposal was viewed by the White House as “insufficient for a deal,” according to a senior US official. However, Iranian news agency Tasnim stated that the US accepted a temporary lifting of Iran’s Oil sanctions during negotiations, while Tehran continues demanding the full removal of sanctions as part of any final agreement.

Short-term technical analysis:

On the four-hour chart, NZD/USD trades at 0.5876. The pair remains under pressure as it holds below both the 20-period Simple Moving Average (SMA) at 0.5881 and the 100-period SMA at 0.5908, keeping the near-term bias tilted to the downside despite the latest bounce off intraday lows. The Relative Strength Index (RSI) hovers below the 50 line at around 45, hinting at fading bearish momentum but not yet enough to challenge the prevailing topside constraints.

On the topside, immediate resistance is seen at the nearby pivot around 0.5876, followed by a tight cap formed by the 20-period SMA at 0.5881 and the horizontal barrier at 0.5882, with a more substantial hurdle at the 100-period SMA near 0.5908. On the downside, initial support emerges at 0.5867, ahead of the next floor at 0.5858; a sustained break below these levels would reinforce the bearish bias and open the way for a deeper pullback in the short term.

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