NZD/USD May Hit the 0.600 Target Soon

Market Analysis – January 25

NZD/USD has been trending higher, supported by an improving New Zealand economic outlook and broad-based weakness in the US dollar. The pair’s upside momentum is being fueled by stronger-than-expected domestic inflation data, which has reinforced expectations that the Reserve Bank of New Zealand may maintain a higher-for-longer policy stance. At the same time, renewed optimism surrounding China’s economic recovery—New Zealand’s largest trading partner—has further boosted demand for the Kiwi. On the US side, softening economic data and growing expectations of a Federal Reserve policy pivot later in the year have weighed on the dollar, providing additional support for NZD/USD.

 

NZD/USD Key Levels

Supply Levels: 0.6000 , 0.60500, 0.61000

Demand Levels: 0.58000, 0.5700, 0.56500

NZD/USD Daily Outlook

The NZD/USD pair has displayed notable bullish price action, positioning the market for potential continuation to the upside. In recent trading sessions, the 0.5900 level proved to be a significant zone, acting as both support and resistance. This level was decisively reclaimed by bullish momentum during the January 22 session. Notably, trading opened around this same price area, and the market went on to close the week near 0.5950.

Given this structure, the pair may be poised to extend gains toward the key 0.6000 level as the forex market opens for the new week.

NZD/USD Short-Term Trend

The trend remains to the upside, supported by sustained bullish sentiment. However, technical indicators are beginning to signal the need for caution. The Relative Strength Index (RSI) is currently indicating overbought conditions. While this is not unusual in a strong uptrend, it does suggest that traders should proceed carefully at this stage.

If price action is able to firmly establish support around the 0.5900 level, it would strengthen the case for continued upward movement.

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