Currency Hedger No Comments

New Zealand Dollar remains confined in a range vs USD amid Iran risks, ahead of US CPI

  • NZD/USD struggles to gain any meaningful traction amid mixed fundamental cues.
  • Geopolitical risks, inflation fears and Fed rate hike bets support the safe-haven USD.
  • The RBNZ’s hawkish tilt limits the downside for the NZD as traders await the US CPI.

The NZD/USD pair seesaws between tepid gains/minor losses during the Asian session on Tuesday and currently trades just below the 0.5900 mark. Spot prices, however, remain confined within a familiar range held over the past week or so, awaiting a fresh catalyst before the next leg of a directional move. Hence, the focus will remain on further developments surrounding the Middle East crisis and the latest US inflation figures this week.

The crucial US Consumer Price Index (CPI) and the Producer Price Index (PPI) are due for release on Wednesday and Thursday, respectively, which will be looked for more cues about the US Federal Reserve’s (Fed) future policy path. This, in turn, will play a key role in influencing the near-term US Dollar (USD) price dynamics and provide some meaningful impetus to the NZD/USD pair. In the meantime, the mixed fundamental backdrop is holding back traders from placing aggressive bets on the USD.

The disappointing US Nonfarm Payrolls (NFP) report forced investors to scale back their expectations for an immediate interest rate hike by the Fed. However, inflation risks stemming from volatile oil prices due to the Iran war underpin prospects for at least one Fed rate hike in 2026. The outlook remains supportive of elevated US Treasury bond yields, which, along with fading hopes for a US-Iran deal, continues to act as a tailwind for the safe-haven Greenback and caps the NZD/USD pair.

Iran ruled out any future negotiations with Trump and said that it will wait until the US President’s term ends on January 20, 2029, to resume talks, dampening hopes for a swift reopening of the Strait of Hormuz. Moreover, traffic through the Bab el-Mandeb Strait remains choked due to the Iran-backed Houthis’ naval blockade against Saudi Arabia. This favors USD bulls, though the Reserve Bank of New Zealand’s (RBNZ) hawkish tilt could limit deeper losses for the NZD/USD pair.

Strategists at BBH remain constructive on the Kiwi, arguing that “NZD has room to keep edging higher against most major currencies.” They point to “above target inflation, more favorable domestic growth outlook, and a policy rate near the lower-end of the RBNZ’s neutral range (2.20%-4.10%)” as factors that “argue for additional RBNZ rate hikes.” Reflecting this backdrop, BBH notes that “the swaps curve price in nearly 100bps of cumulative tightening over the next twelve months to 3.50%,” reinforcing the view that policy expectations continue to offer support for the currency.

NZD/USD 4-hour chart

Chart Analysis NZD/USD

Technical Analysis

The NZD/USD pair continues to consolidate in an over one-week-old range, leaving the near-term bias neutral. The focus remains on whether spot prices can sustain a move away from the 0.5880 area to define the next directional leg. A sustained push higher would open the way for a test of recent minor intraday highs, while a break lower from the current congestion zone would expose prior four-hour lows as the next bearish objective.

Currency Hedger No Comments

Chart of the Day: USD/JPY Recovers After Disappointing Payroll Data

The USD/JPY exchange rate quickly recouped most of the losses triggered by the weak US labour market report and is trading on Monday around 158.20–158.50, virtually where the pair stood prior to the data release. Friday’s payrolls figures showed a fall in employment of 23,000 against an expected increase of 80,000, triggering a sharp sell-off in the dollar and sending USD/JPY down from around 158.30 to approximately 156.70, before buyers quickly returned to the market. The market’s attention is now turning to Wednesday’s release of the US CPI for July, which will determine whether the Federal Reserve still has scope for a rate rise in September.

What the daily chart shows

The attached daily USD/JPY chart (D1 timeframe) shows a clear, well-defined uptrend that has been in place since February, with the price moving consistently along or above one standard deviation below the anchored VWAP since the start of 2026 (as the main support zone for the long-term uptrend). A key element of the chart pattern is the broad resistance zone around 159,000–160,000, marked on the chart as “Resistance area” – the same level which previously, from March to May, acted as a consolidation zone and repeatedly rejected price movements (and currently constitutes the main cluster of the value zone when looking at the volume profile marked since the start of the year), Friday’s long red candle with a long lower shadow was a reaction to the weak payrolls figures – there was a sharp fall from around 163,000–164,000 towards the resistance level, followed by a rebound that saw the week close near 158,500. The current price (158,496) sits right at the lower end of the resistance zone, just below the 159,000 level, suggesting that the market is testing whether the former resistance will now turn into new support.

What’s next for the couple?

The balance of risks remains uncertain, but for the time being it may appear to be tilted slightly towards gains as long as tensions surrounding the US–Iran conflict and the Strait of Hormuz persist, which is keeping bond yields higher (10-year US bonds are still around 4.655 per cent). At the same time, the risk of another joint US–Japan intervention is likely to cap gains around the 160 level, whilst a significantly weaker CPI reading could pave the way for a decline to the 155–156 range, where investors have previously been keen to buy on dips. Wednesday’s CPI reading for July (forecast at 3.4% y/y, down from 3.5% previously) will be a key test for the pair’s future direction, as it will determine whether the market will continue to scale back expectations of a Fed rate rise in September and reverse the trend, or whether the current narrative will prevail.

Currency Hedger No Comments

New Zealand Dollar stalls below 0.5900 as US Dollar regains safe-haven appeal

  • NZD/USD trades around 0.5895 on Monday, virtually unchanged on the day.
  • Middle East tensions support the US Dollar despite signs of weakness in the labor market.
  • The New Zealand central bank’s hawkish stance could limit Kiwi losses ahead of US inflation data.

NZD/USD trades around 0.5895 on Monday at the time of writing, virtually unchanged on the day. The pair consolidates below the 0.5900 level after retreating from its recent monthly high, as the US Dollar (USD) recovers some of the losses registered in the wake of disappointing United States (US) employment data.

The Nonfarm Payrolls (NFP) report released on Friday showed that the US economy unexpectedly lost 23K jobs in July. The previous month’s figure was also revised sharply lower to just 20K job additions from the 57K initially reported. The data points to a cooling labor market and initially weighed on the US Dollar by weakening the case for monetary tightening from the Federal Reserve (Fed).

However, the bearish reaction in the US Dollar fades as geopolitical tensions in the Middle East revive demand for safe-haven assets. Uncertainty surrounding the Strait of Hormuz remains elevated, while fresh attacks by Iran-backed Houthi militants against Saudi energy infrastructure keep concerns over energy supplies alive.

At the same time, higher Oil prices are reviving inflation concerns in the United States (US). Investors fear that energy-driven inflation could force the Fed to keep monetary policy restrictive for longer or even raise interest rates again. Expectations of tighter US monetary policy also help keep US Treasury bond yields elevated, providing additional support to the Greenback.

The international backdrop is also weighing on the New Zealand Dollar (NZD). Data released over the weekend showed that China’s annual Consumer Price Index (CPI) slowed to a six-month low in July, while the Producer Price Index (PPI) eased more sharply than expected. Weaker inflation in China fuels concerns about the world’s second-largest economy and weighs on antipodean currencies, including the Kiwi.

The downside in NZD/USD remains limited, however, by the hawkish stance of the Reserve Bank of New Zealand (RBNZ). The New Zealand central bank maintains a sufficiently restrictive bias to support the New Zealand Dollar and contain bearish pressure on the pair for now.

Investors now turn their attention to US inflation data due this week. The figures could provide fresh clues about the Fed’s interest-rate path as markets weigh a cooling labor market against the risk of renewed energy-driven inflation. Developments in the Middle East are also likely to remain an important driver of the US Dollar and, consequently, NZD/USD.

Chart Analysis NZD/USD

NZD/USD technical analysis

In the one-hour chart, NZD/USD trades at 0.5895, holding a modest bullish bias as it consolidates above the 100-period simple moving average (SMA) near 0.5879 and the 200-period SMA around 0.5863. The pair is grinding higher toward the horizontal resistance at 0.5909, while the Relative Strength Index (RSI) around 61 suggests firm but not overextended upside momentum, keeping buyers in control as long as price stays above the underlying moving average floor.

On the downside, immediate support is seen at the 100-period SMA around 0.5879, ahead of the 200-period SMA near 0.5863 and the horizontal level at 0.5860, which together define a broader demand band protecting the recent recovery. On the topside, a break above resistance at 0.5909 would open the door for a continuation of the advance, whereas repeated failure there would risk a pullback back toward the clustered supports below.

Currency Hedger No Comments

New Zealand Dollar drifts lower as USD recovers from post-NFP lows amid Mideast jitters

  • NZD/USD meets with a fresh supply on Monday as geopolitical risks underpin the USD.
  • Higher oil prices fuel inflation fears and Fed hike bets, which further benefit the buck.
  • The hawkish RBNZ could support the NZD and limit losses ahead of US inflation figures.

The NZD/USD pair is seen extending Friday’s late pullback from the vicinity of the monthly peak – levels just above the 0.5900 mark – and drifting lower at the start of a new week. Spot prices, however, remain confined in a familiar range held over the past week or so and currently trade around the 0.5880 region, down 0.20% for the day, amid a modest US Dollar (USD) strength.

The immediate market reaction to the disappointing release of the US Nonfarm Payrolls (NFP) report on Friday seems to have faded as the geopolitical risk premium offers some support to the safe-haven USD. Meanwhile, the uncertainty over the Strait of Hormuz and fresh attacks by Iran-backed Houthi militants against Saudi energy infrastructure act as a tailwind for crude oil prices. This continues to fuel inflation fears and bets for at least one interest rate hike by the US Federal Reserve (Fed) in 2026.

Meanwhile, data released over the weekend showed that China’s annual consumer inflation rate slowed to a six-month low and producer price inflation eased more sharply than expected in July. This turns out to be another factor weighing on antipodean currencies, including the New Zealand Dollar (NZD), and contributing to the NZD/USD pair’s slide. However, the Reserve Bank of New Zealand’s (RBNZ) hawkish tilt could support the New Zealand Dollar (NZD) and help limit deeper losses for the pair.

Traders might also opt to wait for the latest US inflation figures, due this week, for more cues about the Fed’s future policy path. The outlook, along with further developments surrounding the Middle East crisis, will drive the USD demand and provide some impetus to the NZD/USD pair. In the meantime, the aforementioned mixed fundamental backdrop makes it prudent to wait for a breakdown through a one-week-old trading range support near the 0.5860 region before placing aggressive bearish bets.

NZD/USD 4-hour chart

Chart Analysis NZD/USD

Technical Analysis

With the NZD/USD pair hovers in a tight range and lacks a clear directional edge, leaving the near-term bias broadly neutral around the 0.59 handle. The 0.5865-0.5860 region should act as a short-term pivot and a sustained break below would be needed to bac the case for any further near-term depreciating move.

Currency Hedger No Comments

The CAD pulls back from two-month top as rebounding USD counters higher oil prices

  • USD/CAD kicks off the new week on a slightly positive note, though it lacks follow-through.
  • Geopolitical uncertainties and bets for at least one Fed rate hike this year support the USD.
  • Friday’s upbeat Canadian jobs data and oil prices underpin the Loonie, capping spot prices.

The USD/CAD pair attracts some dip-buyers at the start of a new week and recovers a part of Friday’s heavy losses to the 1.3925 area, or a nearly two-month low. Spot prices climb back above mid-1.3900s during the Asian session, though the upside potential seems limited amid a combination of diverging forces.

As investors look past Friday’s disappointing US Nonfarm Payrolls (NFP) report, the US-Iran standoff keeps the geopolitical risk premium in play and acts as a tailwind for the safe-haven US Dollar (USD). Furthermore, bets that the US Federal Reserve (Fed) will raise borrowing costs by the end of this year amid inflation risks stemming from recovering crude oil prices lend support to the Greenback and the USD/CAD pair.

Meanwhile, uncertainties surrounding the reopening of the Strait of Hormuz remain supportive of a bid tone surrounding crude oil prices, which is seen underpinning the commodity-linked Loonie. The Canadian Dollar (USD) could further benefit from the upbeat domestic jobs report, released on Friday. This, in turn, might hold back traders from placing aggressive bullish bets on the USD/CAD pair and cap any meaningful gains.

Hence, it will be prudent to wait for strong follow-through buying before confirming that the recent pullback from the vicinity of mid-1.4200s, or the year-to-date high touched in June, has run its course and positioning for further upside. Traders might also opt to wait for this week’s release of US inflation figures. Moreover, further developments surrounding the Middle East crisis will be looked upon for some impetus.

USD/CAD daily chart

Chart Analysis USD/CAD

Technical Analysis:

The USD/CAD pair’s ability to stay above the 100-day Simple Moving Average (SMA) at 1.3917 suggests underlying demand is still cushioning pullbacks, even as upside momentum appears measured. A break would expose a deeper correction. On the flip side, traders may look to psychological round figures and recent swing highs to define the next topside hurdles as long as spot prices hold above the 100-day SMA.

Currency Hedger No Comments

EUR/USD Buyers eye a break above the 100-day SMA

  • EUR/USD holds near a seven-week high as weak US payrolls weigh on the US Dollar.
  • Bullish RSI and MACD readings suggest buyers retain the upper hand.
  • The 100-day SMA caps immediate gains, with a break exposing the 200-day SMA.

EUR/USD edges higher on Friday, supported by a softer US Dollar (USD) as traders scale back Federal Reserve (Fed) rate-hike bets following a disappointing US Nonfarm Payrolls (NFP) report. At the time of writing, the pair trades around 1.1562, hovering near a seven-week high.

Price action, however, has been confined to a narrow range for more than a week, with the 100-day Simple Moving Average (SMA) capping immediate upside attempts after the pair staged a rebound from below 1.1400 in late July.

Still, the near-term outlook remains bullish, as the dovish repricing of Fed rate expectations and optimism surrounding peace in the Middle East and the reopening of the Strait of Hormuz could keep the US Dollar on the defensive. The EUR/USD recovery faces its next major test from the US Consumer Price Index (CPI) data due next week.

From a technical perspective, the daily chart shows that the 50-day SMA at 1.1471 offers immediate support, followed by the 1.1400 psychological mark.

The Relative Strength Index (RSI) at 63 points to bullish momentum, while the Moving Average Convergence Divergence (MACD) indicator stays positive, which hints that buyers retain an edge as long as price holds over the short-term average.

On the topside, immediate resistance is located at the 100-day SMA at 1.1568, followed by the 200-day SMA at 1.1629. A sustained break above these levels would expose the horizontal barriers at 1.1700 and 1.1800.

Currency Hedger No Comments

Mexican Peso hits five-month high on weak US jobs data

  • Mexican Peso rallies as weak NFP crushes Fed hike expectations.
  • Mexican inflation falls to six-year low after Banxico hold.
  • USD/MXN rebounds from a low of 17.09 but remains under bearish pressure.

The Mexican Peso (MXN) capitalizes on a weaker US jobs report and soars versus the US Dollar (USD) on Friday as risk appetite improves and the Greenback gets battered on speculation that the Federal Reserve (Fed) might not raise rates in 2026. At the time of writing, the USD/MXN pair trades at 17.18 after refreshing five-month lows at 17.09.

USD/MXN tumbles as Mexico’s inflation approaches target

The Mexican economic docket showed that inflation eased to a six-year low, from 3.37% to 3.12% YoY in July, according to INEGI, the National Statistics Agency. Core inflation, which strips volatile items, was 3.95% YoY, slightly exceeding forecasts of 3.94%. The report came a day after the Bank of Mexico (Banxico) left rates unchanged at 6.50%, while hinting that the main reference rate would remain steady for the foreseeable future.

Should inflation continue its downward trajectory, it could end 2026 below Banxico’s 3.5% forecast for headline and underlying inflation in 2026. The central bank projects that inflation will converge to its 3% goal in the last quarter of 2027.

Earlier, US Nonfarm Payrolls for July showed a 23K job loss, missing the forecast of an 80K gain. May and June revisions cut 103,000 jobs, lower than before. The data support the Fed’s pause on rate hikes, but the Unemployment Rate fell from 4.2% to 4.1%.

The report weakened the Greenback. The US Dollar Index (DXY), which measures the US Dollar’s strength against six other currencies, has fallen by 0.42% to 99.54.

Next week, the Mexican economic calendar will feature June Industrial Output. Across the southern border, investors are eyeing the release of inflation on the consumer and producer side, followed by jobless claims data and the University of Michigan (UoM) Consumer Sentiment.

USD/MXN Price Forecast: Technical outlook

Chart Analysis USD/MXN
USD/MXN daily chart

In the daily chart, USD/MXN trades at 17.1364, extending its retreat and holding below the clustered simple moving averages (SMA) trio now aligned near 17.4061, which reinforces a bearish near-term bias. The pair has also slipped back under the more recent downward resistance trend line, whose break point at 17.4584 acts as an additional topside cap, while the Relative Strength Index (14) at 32.4 hovers just above oversold territory, hinting that selling pressure is stretched but not yet exhausted.

On the topside, initial resistance is seen at the Triple SMA around 17.4061, followed by the downward-sloping trendline reference at 17.4584, where further rallies would likely stall unless momentum improves decisively. On the downside, the current area around 17.1364 is the immediate battleground, with a deeper slide opening the way toward the earlier structural break zone near 15.6962, while the RSI’s proximity to oversold levels suggests that any move lower could eventually invite a corrective bounce rather than a sustained reversal for now.

Currency Hedger No Comments

GBP/USD Bulls need 1.3560 to unlock 1.3600

  • GBP/USD holds sideways, but upside bias survives above 1.3406.
  • Break above 1.3558 opens the path toward 1.3600.
  • Failure below 1.3500 risks a pullback toward key SMA support.

The Pound Sterling (GBP) edges higher by some 0.29% against the US Dollar (USD) on Friday, yet it remains trading sideways, unable to decisively crack 1.3500 after reaching a three-week peak of 1.3509, and has retreated to the 1.3490 area.

GBP/USD Price Forecast: Technical outlook

The technical picture shows that GBP/USD is consolidating, yet it is slightly tilted to the upside after clearing the 200-day Simple Moving Average (SMA) at 1.3406. Market structure suggests the uptrend might resume once buyers reclaim the July 15 swing high at 1.3558, opening the door to a test of 1.3600.

In that scenario, the next area of interest for GBP/USD would be the May 11 swing high at 1.3653, followed by 1.3700.

On the flip side, if GBP/USD remains below 1.3500, look for a pullback towards August’s 3 low of the day at 1.3417. A breach of the latter will expose the convergence of the 100- and 200-day SMAs at 1.3406/05, followed by the 50-day SMA at 1.3365.

GBP/USD Price Chart – Daily

GBP/USD daily chart