NZD/USD extended its rebound from 0.5580 this week as the pair capitalized on a softer US Dollar, driven by the sharp deterioration in ADP employment data. The weak labor reading reinforced expectations of a December Fed rate cut, prompting another wave of USD selling across major pairs and giving the Kiwi room to advance. Underlying support also stems from the RBNZ’s hawkish cut last week, where policymakers signaled that the easing cycle has likely ended.
Technically, NZD/USD’s break above the 55 D EMA signals that the three-wave corrective decline from 0.6119 has likely completed at 0.5580. Momentum has clearly shifted to the upside, and the structure argues that the pair may now be in the early stages of a broader rally.
The next key hurdle is the 0.5799 support-turned-resistance. Sustained break above this level would further confirm bullish reversal and strengthen the view that the rise from 0.5580 represents the third leg of the larger pattern from 0.5484 low earlier this year.
That would also open the door through 0.6119 resistance, even if the advance from 0.5484 proves to be only a corrective rally within the broader downtrend from the 0.7463 (2021 high).
