NZD/USD price holds near daily low as traders await FOMC minutes for direction
NZD/USD holds at 0.5625 as market awaits FOMC signals
The NZD/USD pair remained subdued around 0.5625 during early European trading on Wednesday, as market participants awaited the release of the FOMC meeting minutes for cues on future Federal Reserve policy. After retreating from a three-week-high, the Kiwi failed to attract significant buying interest amid elevated US bond yields and broader risk aversion stemming from geopolitical tensions.
Despite its recent weakness, analysts caution that a break below 0.5585 could signal further downside for NZD/USD, while a recovery above 0.5700 would suggest renewed bullish momentum. Until clearer signals emerge, traders will remain focused on economic data and geopolitical developments for directional cues.
NZD/USD price analysis (Nov 2024 - Jan 2025) Source: TradingView.
Market reacts cautiously ahead of US labor data
Alongside the FOMC minutes, traders anticipate the release of US labor market data, including the ADP private-sector employment report and weekly initial jobless claims. Recent upbeat US macroeconomic indicators have bolstered the US dollar (USD), limiting the Kiwi's rebound. However, the NZD/USD pair has shown resilience near its key support at 0.5585—the lowest since October 2022—indicating that traders may be hesitant to commit ahead of the Fed’s next policy signals.
The recent 15-minute chart reveals an initial bullish breakout that faced strong resistance near 0.5641, leading to a pullback toward 0.5625. Support levels at 0.5623 and the blue trendline indicate potential areas for a rebound, while the bearish break of the ascending support trendline suggests short-term downside pressure. If NZD/USD fails to hold above the key support, further declines toward 0.5580 could materialize. Conversely, a break above the 0.5641 level could rekindle bullish momentum, targeting higher levels.
Hawkish Fed and geopolitical risks weigh on Kiwi
The Federal Reserve’s December policy meeting reinforced its hawkish stance, with indications of slower rate cuts in 2025. This outlook has contributed to rising US Treasury yields and strengthened the USD. Simultaneously, concerns over President-elect Donald Trump's potential tariff policies and escalating US-China trade tensions have heightened demand for safe-haven assets, keeping the Kiwi under pressure.
In our previous analysis, we noted how US-China trade tensions and upbeat US data influenced the Kiwi's decline, a trend that continues as markets stay on edge.
