A souring global backdrop and surging crude have combined to put the squeeze on the . With key technical levels giving way and momentum turning bearish, near-term risks remain skewed to the downside.
- Kiwi tracking crude, not China or
- Channel and 50DMA support both broken
- .5900 test on radar; .5850 next if it fails
NZD/USD Summary
As a small, open economy closely tied to global growth, it’s no surprise the New Zealand dollar is struggling in the current environment, weighed down by trade war uncertainty and heightened geopolitical tensions in the Middle East. As a net energy importer, it’s exposed to abrupt price spikes and supply disruptions. Throw in a technical breakdown that explains much of the recent decline in NZD/USD, and it’s looking increasingly likely that the near-term highs are in for the Kiwi.
Kiwi Hindered by Crude Price Spike
Source: TradingView
Before diving into the NZD/USD technical picture, New Zealand’s status as a net importer of petroleum products seems to be working against the Kiwi, with the currency increasingly negatively correlated with both and over the past fortnight.
In contrast, its relationships with traditional drivers like the , broader risk sentiment (as proxied by ), and cyclical assets like copper have either weakened or disappeared altogether.
Given the similar economic make-up and fuel security dynamics, its 0.99 correlation with suggests traders may want to keep an eye on crude oil futures for directional cues on the Kiwi.
NZD/USD Bearish Break Sparks Accelerated Selling
Source: Trading View
But it’s not just geopolitics creating headwinds. Technicals are clearly playing a role in the latest unwind. , the break of channel support midway through last the week proved to be a turning point, with losses accelerating even before the escalation in geopolitical tensions.
A break of minor support at .5990 saw NZD/USD resting on the 50-day moving average into the weekend. With risk appetite souring earlier Monday, that level has now given way, sparking a fresh wave of selling. Having already taken out the May 28 low at .5925, bears will be eyeing a move toward support at .5900. If that level breaks, the focus shifts to the 200-day moving average and horizontal support at .5850.
Momentum indicators are also turning bearish. RSI (14) is below 50 and trending lower, while MACD has crossed beneath the signal line and is closing in on a move below zero.
However, the pair has already fallen a long way fast, so chasing shorts down here doesn’t look like a high-probability play. The preference would be to wait for a clean break of .5900 or a bounce toward the 50-day moving average, allowing for stops to be placed above either level to guard against a reversal.