Forex News

• NZD/USD weakens to near 0.5590 in Tuesday’s early European session.
• The pair keeps a bearish vibe amid oversold RSI conditions.
• The first downside target is seen at 0.5555; the immediate resistance level emerges at 0.5626.

The NZD/USD pair loses momentum to around 0.5590 during the early European trading hours on Tuesday. The New Zealand Dollar (NZD) weakens near the lowest since November 2025 against the US Dollar (USD), pressured by elevated US Treasury yields and uncertainty ahead of the November general election.

Markets are now pricing in around a 58% odds of a 25-basis-point rate hike to 3.0% by the Reserve Bank of New Zealand (RBNZ) later this month, while a December move remains more than fully priced in, according to Reuters.

Traders will closely monitor the minutes of the September Federal Open Market Committee (FOMC) meeting, which will be released on Wednesday. This report could offer some hints about future monetary policy after the US central bank raised interest rates last month for the first time in three years.

Logan’s hawkish tilt boosts Dollar as markets brace for further Fed tightening

Fed’s Logan speech registers a notably hawkish tone, with a 9.2/10 FXS Speechtracker score compared to the established baseline of 8.1/10, underscoring a stronger inclination toward tighter policy. The emphasis on higher yields reflecting both increased term premiums and expectations for higher interest rates, alongside calls for at least 50 bps more in rate hikes and several additional moves, signals a clear push toward more restrictive conditions despite acknowledging policy is only modestly tight. This combination of strengthening economic expansion, a well-balanced labor market, and a firm commitment to reviving price stability reinforces upside risks for the Dollar and keeps rate-sensitive assets on alert.

The FXS Fed Sentiment Index climbed by 1.68 points to 136.59, confirming a deeper move into hawkish territory well above the neutral 100 threshold. The alignment of a higher FXS Fed Sentiment Index with the elevated FXS Speechtracker score highlights a consistent hawkish narrative that supports expectations for further Fed tightening and sustained Dollar strength.

Technical Analysis: NZD/USD retains a negative bias amid oversold conditions

In the daily chart, NZD/USD extends its bearish near‑term bias as spot holds beneath the 20‑day Bollinger middle band and the 100‑day moving average (MA). Price is pressed toward the lower Bollinger band, while the Relative Strength Index (14) sits in oversold territory around 24.5, hinting that bearish momentum is stretched but not yet reversed.

On the downside, the lower Bollinger band at 0.5555 offers immediate support level. A decisive break below this floor would open the way for the April 8 low, 2025 of 0.5520, followed by the April 9 low, 2025 of 0.5485. 

On the topside, initial resistance level is located at the June 26 low of 0.5626. The next hurdle to watch is the 20‑day Bollinger middle band at 0.5700, en route to the 100‑day MA at 0.5805 and the upper Bollinger band near 0.5840, which together define a broader cap on recovery attempts.  

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Danske Research Team report that Equities moved higher on Monday, with the Nasdaq hitting a fresh record and the S&P 500 just 0.3% below its own peak. Gains occurred despite another backup in long‑term yields, with positive market breadth and an unusual sector mix. The move is described as a broader catch‑up session rather than classic risk‑on or inflation‑relief buying.

Nasdaq at record in atypical sector rally

"Equities moved higher on Monday and finished not far from session highs. The Nasdaq even reached a fresh record, while the S&P 500 is just 0.3% below its own."

"The main takeaway from yesterday's market action was that equities rose despite another backup in long-term yields. Unlike last week, gains were not driven solely by technology stocks, as market breadth was positive as well."

"However, the sector mix was unusual, with materials, communication services, energy, and banks among the outperformers. Defensives such as healthcare and consumer staples were also strong, while industrials and real estate lagged."

"Hence, this was neither a classic risk-on move nor inflation-relief. Rather, it appeared to be a broader catch-up session without clear directional drivers, other than the fact that parts of the market have remained sidelined for too long."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

• AUD/USD falls back from 0.6975 as the US Dollar outperforms.
• Surging US bond Yields lend strength to the US Dollar.
• The Fed signaled in September that there will be one more interest rate hike this year.

The Australian Dollar (AUD) gives back its early gains after rising to near 0.6975 and turns marginally lower at around 0.6964 against the US Dollar (USD) during the European trading session on Tuesday. The Aussie pair comes under pressure as the US Dollar trades higher in the wake of surging United States (US) bond yields.

At press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.15% higher to near 102.25. The DXY is close to its annual high of 102.54 posted on Monday.

Yields on US-backed securities continue rallying as inflation projections remain elevated despite some correction in oil prices. Several Federal Reserve (Fed) officials have warned that high inflation remains a key challenge for them, but have pushed back urgency of further interest rate hikes.

Williams tempers post-hike urgency but keeps Fed firmly hawkish

Fed’s Williams delivers a moderately hawkish message, with a FXS Speechtracker score of 6.4 slightly above the 6.2 historical average, signaling a tone just firmer than the established baseline. The emphasis on “no need for urgency” after the September rate hike, yet conditional guidance for one further hike this year if the economy meets expectations, underscores a data-dependent stance that still prioritizes getting inflation back to 2% and preventing it from becoming entrenched. Projections of inflation at 3.5% this year, a 2% target only reached in 2028, solid GDP growth and stable unemployment, plus AI-related investment pressures, collectively support a narrative of persistent inflation risks that keeps the Dollar underpinned on balance.

The FXS Fed Sentiment Index fell by 1.43 points to 144.29, indicating a modest pullback in perceived hawkishness even as the index remains well above the neutral 100 threshold. Despite the decline, the elevated reading confirms that, in aggregate, Fed communication tracked by the FXS Fed Sentiment Index and FXS Speechtracker still resides in clear hawkish territory, suggesting ongoing support for the Dollar relative to lower-yielding peers.

Meanwhile, investors await the Federal Open Market Committee (FOMC) minutes of the September policy meeting, which will be released on Wednesday. In the policy meeting, the Fed hiked policy rates by 25 basis points (bps) to the 3.75%-4.00% and signaed at least one more this year.

AUD/USD Technical Analysis

In the daily chart, AUD/USD trades at 0.6962. The pair holds a bearish near-term bias as price remains below the 20-day Exponential Moving Average (EMA) at 0.7035, suggesting rallies are still capped by this dynamic barrier. The Relative Strength Index (RSI) at 34 hovers just above oversold territory, hinting that while downside pressure persists, selling momentum may be losing intensity.

On the topside, immediate resistance is located at the 20-day EMA at 0.7035, and a daily close above this level would be needed to ease the current bearish tone and open the way for a more sustainable recovery. On the downside, the absence of nearby measured supports leaves the pair vulnerable to further declines, with traders likely watching for fresh lows below 0.6962 to gauge whether bearish extension is resuming.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

• EUR/USD dips towards the 1.1200 area after being capped around 1.1230 during the Asian session.
• German Factory Orders plunged in August amid a sharp decline in big-ticket orders.
• Political uncertainty in most of the Euro Area's major countries and French debt woes are hammering the Euro.

The Euro (EUR) keeps heading lower against a firmer US Dollar (USD) on Tuesday, as growing political uncertainty and a deteriorating fiscal outlook have renewed fears of debt contagion in the region. German Factory Orders have failed to provide significant support, pushing the EURUSD pair toward the 1.1200 level after a mild recovery attempt, which it was capped just below 1.1230 earlier in the day.

Data released by Destatis on Tuesday revealed that new orders for products manufactured in Germany plunged 10.6% in August, following a 3.2% increase in July, largely exceeding the 1% decline seen in the previous month. Year-over-year, factory Orders grew 2.7%, down from a 14% increase in the previous month.

The report highlights the decline in sales of transport equipment, such as aircraft, ships, trains and military vehicles,  which fell 61% on seasonally adjusted terms after having doubled in July, as the main reason for August's figures. Excluding large-scale orders, sales of all other items declined a mere 0.1%.

Growing debt concerns and political uncertainty hurt the Euro

The Euro remains under pressure amid rising concerns about public fnances, with the gap between France’s OAT yield and the German Bund at levels unseen since the 2009 financial crisis. France is also facing a political gridlock that discards any significant savings plan, at least until the presidential elections in 2027, and to make things worse, Spanish President Pedro Sanchez announced a snap election in November. If we add to this the fragility of Frederich Merz's cabinet in Germany, we obtain the picture of the uncertain political scenario that keeps investors away from the Euro.

Oil prices, another key source of Euro weakness, have pulled back from highs, providing some relief. Brent Oil retreated below the key $100 per barrel on Monday, which allowed the EUR/USD to regain the 1.1200 level. Reports from the Middle East reveal that the amount of Oil traffic through the Strait of Hormuz has increased considerably, but prices are still more than 25% above August's lows, with the US-Iran war in a grey area and with prospects of a peace deal still far off.

The European Central Bank (ECB) remains between a rock and a hard place, having to fine-tune its monetary policy. Further monetary tightening might add fuel to the government bonds sell-off. Inflation, on the other hand, is running at levels well above the 2% target and does not seem to retreat unless the Middle East improves radically, which adds a layer of uncertainty to the Eurozone's economic outcome.

In the US, ISM Services Purchasing Managers Index data released on Monday showed that business activity slowed down beyond expectations in September, as prices paid by businesses increase with demand still at high levels. The US Dollar, however, remains drawing support from the high US Treasury yields, which hit fresh multi-decade highs.

ING analysts Warren Patterson and Ewa Manthey note that ICE Brent is still finding support around the $100/bbl level as geopolitical risks in the Persian Gulf outweigh an improving supply backdrop. They highlight recent attacks on Saudi infrastructure, adjustments in Kuwait and Saudi output and pricing, and lingering vulnerability in European natural gas storage ahead of winter.

Brent supported by Gulf tensions

"ICE Brent continues to find support around the $100/bbl level, with geopolitical risks outweighing an improvement in the supply picture."

"While there are growing signs of a recovery in oil flows from the Persian Gulf, the market remains nervous about potential supply disruptions from the region. This is keeping prices well-supported for now. This nervousness is likely to persist until there are signs of progress in a deal between the US and Iran."

"Reports yesterday said Saudi Arabia’s East-West pipeline was targeted again. It only recently returned to operation following an earlier attack. Though the latest attack doesn’t appear to have disrupted flows through the pipeline, it’s a reminder that flows remain at risk."

"Oil producers in the Persian Gulf continue to adapt to the region's situation. Kuwait said that it is producing at 75% of pre-war levels, while the Saudis also cut the official selling price of their Arab Light into Asia for November loadings, a sign of an improving supply picture."

"The European gas market remains vulnerable, despite signs of a more recent pick-up in LNG flows from the Persian Gulf. EU gas storage is just shy of 73% full. This is down from 83% at the same stage last year, and below the 5-year average of 88%."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)