NZD: NZD/USD - Breaks Above 0.5760, Focus Turns To 0.5800-50

The NZD/USD had a range overnight of 0.5692 - 0.5728, Asia is trading around 0.5705. US yields ended higher and the USD continued to grind higher challenging some pivotal resistance. The NZD drifted lower but it did find good demand sub 0.5700 once more. While price remains below the 0.5800/50 area I suspect rallies continue to be faded looking for a potential move back towards the 0.5500/0.5600 area. NZD continues to stand out as a short against a resurgent USD but it is worth noting that because of the size of the market the market can very quickly become all positioned the same way, so I think the USD will need to break above its pivotal resistance for the NZD to test those lows.

• Options : Closest significant option expiries for NY cut, based on DTCC data: none. Upcoming Close Strikes : 0.5650(NZD1.1b Nov 5), 0.5675(NZD1.05b Nov 5), 0.5750(NZD604m Nov 5) - BBG
• Data/Event: The key event in NZ this week is the Q3 labour market and wages data released on Wednesday. Filled jobs for the quarter signal a stabilization but employment is likely to have remained weak with consensus forecasting it to rise only 0.1% q/q to be still down 0.2% y/y. The unemployment rate is expected to rise 0.1pp to 5.3%, in line with the RBNZ’s August projections. Soft labour demand is likely to weigh on private wage growth which is forecast to rise around 0.4% q/q after 0.6%.

Fig 1: NZD/USD Spot Daily Chart

Source: MNI - Market News/Bloomberg Finance L.P

• RES 4: 1.4200 Round number resistance  
• RES 3: 1.4167 50.0% retracement of the Feb 3 - Jun 16 bear leg
• RES 2: 1.4111 High Apr 10
• RES 1: 1.4080 High Oct 16 and the bull trigger
• PRICE: 1.4040 @ 16:35 GMT Nov 3
• SUP 1: 1.3979/3888 Low Oct 29 and key short-term support 
• SUP 2: 1.3852 Bull channel base drawn from the Jul 23 low 
• SUP 3: 1.3769 Low Sep 19 
• SUP 4: 1.3727 Low Aug 29 and a bear trigger

A strong rally in USDCAD last week highlights a reversal of the corrective bear leg between Oct 14 - 29, and today’s gains reinforce this theme. The climb suggests that a doji candle on Oct 29 is a valid reversal signal. A continuation higher would open 1.4080, the Oct 16 high and a bull trigger. Key short-term support and the bear trigger has been defined at 1.3888, the Oct 29 low. First support lies at 1.3979, the 20-day EMA. 

The AUD/USD had a range overnight of 0.6518-0.6558, Asia is trading around 0.6540. US yields ended higher and the USD continued to grind higher challenging some pivotal resistance. The AUD/USD is back within its recent 0.6400-0.6650 range with the pivot between 0.6500-0.6550 finding some demand first up, we have the RBA today but the market is not expecting them to move.

• MNI RBA Preview-November 2025: CPI Outlook Key To Rates. The Q3 trimmed mean print at 3.0% y/y up from 2.7% and at the top of the 2-3% target band was a “material miss” for the RBA and meant that the Board is now highly likely to leave rates at 3.6% at its 4 November decision. Updated staff forecasts will be released and the underlying inflation path is likely to be the focus to see how far out the return to the 2.5% band mid-point has been pushed out.
• The Board will need to see inflation resuming its trend lower towards 2.5% before it is likely to consider cutting rates again. Thus, rates are probably on hold in December and the Q4 CPI data on 28 January will be a key input into the 3 February decision.
• Options : Closest significant option expiries for NY cut, based on DTCC data: 0.6625(AUD 944m). Upcoming Close Strikes : 0.6500(AUD822m Nov 7), 0.6600(AUD682m Nov 7) - BBG
• Data/Event: RBA Cash Rate Target 

Fig 1: AUD/USD spot Daily Chart

Source: MNI - Market News/Bloomberg Finance L.P