The New Zealand dollar remained under pressure against the US dollar on Monday, with NZD/USD trading near 0.5620 during European hours. The pair struggled to recover as investors assessed uncertainty surrounding the US midterm elections and prepared for New Zealand’s upcoming labour-market report. The technical outlook also remained weak, with the exchange rate trading below its 20-day Exponential Moving Average (EMA) at 0.5655. A decisive break beneath the October low of 0.5564 could expose the pair to another leg lower.
US election uncertainty weighs on NZD/USD
The US dollar recovered part of its earlier losses, although the US Dollar Index (DXY) remained lower near 101.70, down approximately 0.3% on the day. The index had earlier touched 101.43 before trimming its decline.
Currency markets are focused on the November 3 US midterm elections. According to prediction-market estimates reported by Reuters and Barron’s, Democrats had roughly a 70%–72% probability of gaining control of both chambers of Congress. These odds reflect market expectations, not confirmed election results.
ING currency strategist Chris Turner highlighted the possibility that a Democratic sweep could create political uncertainty around government spending, debt-ceiling negotiations and future policy decisions. Such developments could weigh on the dollar, although the impact would depend on the election outcome and the administration’s response.
Investors are also monitoring US economic releases, including the October ISM Manufacturing PMI. The survey provides an indication of activity across the US manufacturing sector and can influence expectations for economic growth and Federal Reserve policy.
New Zealand jobs data in focus
Attention will shift toward New Zealand’s third-quarter labour-market report, scheduled for November 4. Economists expect the unemployment rate to ease to 5.5% from 5.6% in the June quarter. The result could influence expectations for the Reserve Bank of New Zealand and the New Zealand dollar.
A stronger employment report could support the Kiwi by suggesting that domestic economic conditions are improving. Conversely, weaker hiring or rising unemployment could reinforce expectations of a softer economic outlook and increase pressure on the currency.
The previous unemployment rate of 5.6% represented a relatively elevated level, making the upcoming release important for assessing the direction of New Zealand’s labour market.
NZD/USD forecast: 0.5564 support at risk
The daily technical structure remains bearish while the pair trades below its 20-day EMA at 0.5655. The Relative Strength Index (RSI) stands near 41, below the neutral 50 threshold. This indicates subdued buying momentum, although the pair has not entered conventional oversold territory.
Traders are watching these technical levels:
- Immediate resistance: 0.5655, the 20-day EMA.
- Critical support: 0.5564, the October 14 low.
- Bearish trigger: A sustained daily break below 0.5564.
- Bullish signal: A daily close above 0.5655.
Conclusion
NZD/USD retains a bearish near-term outlook as weak technical momentum and uncertainty surrounding the US election keep buyers cautious. A decisive break below 0.5564 could trigger further losses and confirm a fresh downside move. However, a recovery above 0.5655 would weaken the bearish structure and create room for a corrective rebound. The US election outcome and New Zealand’s November 4 employment report are likely to determine whether the Kiwi extends its decline or begins to recover.
Sources & Methodology
Primary-source standard: Market-moving facts should link to original data releases, regulator notices, company filings or official project announcements whenever available. Secondary reporting is used for additional context, not as a substitute for original evidence.
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