NZD/USD is currently the standout performer of the week, rising around 1.5% and outperforming most major peers. The pair is extending its rebound from the November low, with momentum indicators pointing to an upside re-acceleration phase rather than a fading corrective bounce. Continued gains would reinforce the case that NZD/USD is already reversing the broader downtrend from the July high. Sustained push higher would open the path toward 0.60 handle.
Fundamental developments have turned more supportive in recent weeks. The most important shift came from the RBNZ, which signaled that the 25bp rate cut delivered in November was likely the final move of the easing cycle. That guidance marked a clear change in tone after months of downside growth concerns.
Subsequent data have largely validated the RBNZ’s stance. GDP rebounded a strong 1.1% qoq in Q3, more than offsetting the surprise -0.9% qoq contraction seen in Q2. Business sentiment has also surged, with ANZ Business Confidence jumping to its highest level in three decades in December.
These developments have fueled early speculation that the RBNZ could even consider rate hikes toward the end of 2026 if the recovery gains traction. However, that narrative remains premature and highly conditional on sustained improvement across the economy.
New RBNZ Governor Anna Breman has already pushed back firmly against talk of tightening, emphasizing that policy is not on a preset path. Indeed, pockets of weakness remain. The services sector continues to lag, with the BNZ Services index stuck at 46.9 in November.
Technically, NZD/USD’s rise from 0.5580 resumed by breaking through 0.5830 support this week. The strong support from 55 D EMA is a clear near term bullish sign. Immediate focus is now on medium term falling trend line resistance (now at 0.5864). Sustained break there will reinforce the case that whole fall from 0.6119 has completed as a three-wave correction at 0.5580.
Further break of 61.8% projection of 0.5580 to 0.5830 from 0.5735 at 0.5890 would prompt upside acceleration to 0.6006 cluster resistance (100% projection at 0.5895). In any case, near term outlook will now stay bullish as long as 0.5735 support holds.
