New Zealand Dollar steadies after two-month low slide

• NZD/USD steadies around 0.5800 on Friday after diving to a near two-month low earlier in the American session.
• A broadly stronger US Dollar, lifted by Federal Reserve rate-hike bets and rising Treasury yields, drove the slide.
• A cautious Reserve Bank of New Zealand keeps the Kiwi on the back foot, with Business NZ PMI and US inflation data next on the radar.

NZD/USD is clinging to the 0.5800 mark at the start of the Asian session on Friday after dipping to a near two-month low around 0.5797 earlier in the American session. The pair has since clawed back to broadly unchanged levels, but the tone remains heavy after a steep multi-day slide from the 0.5900 area.

A hot United States (US) Producer Price Index (PPI) final demand prices rose 5.4% in the year to August.

New Zealand's Business NZ Manufacturing PMI for August is due later on Friday, after a previous reading of 54.3. The bigger test comes with the US Consumer Price Index (CPI), which will shape Fed expectations into next week's meeting. A hot print would pile fresh pressure on NZD/USD, while a soft one could hand the Kiwi room to recover.

Short-term technical analysis:

On the 4-hour chart, NZD/USD trades at 0.5800, keeping a bearish near-term tone as it holds beneath both the 20-period and 100-period Simple Moving Averages (SMAs) at roughly 0.5844 and 0.5907, respectively. The Relative Strength Index (RSI) hovers in oversold territory near 28, suggesting downside momentum is stretched but not yet negated, while price action remains capped by these overhead averages.

On the topside, initial resistance emerges at 0.5808, followed by a more meaningful barrier at 0.5832, with the 20-period SMA at 0.5844 and the 100-period SMA at 0.5907 reinforcing a wider supply zone higher up. On the downside, immediate support is aligned at 0.5797 ahead of 0.5793, where a break would expose fresh lows and extend the current bearish phase despite the already oversold RSI backdrop.

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