0.5560 provides key support for NZD/USD

• New Zealand Dollar rebounds towards 0.5600 against the US Dollar following a retest of the 18-month low at 0.5564
• Majorities in both the House and the Senate go to the Democrats.
• October’s US ADP Employment Change and ISM Services PMI releases are in focus for investors.

At around 0.5600 against the US Dollar (USD), the New Zealand Dollar (NZD) is retaining its early gains during Wednesday’s European session. The Kiwi pair has rebounded from a retest of its 18-month low of 0.5564.

Signs of a US Dollar recovery following the United States (US) midterm election result are expected to leave the Kiwi pair’s outlook uncertain. The Democrats secured majorities in both the House and the Senate.

Despite a substantial rebound from its session low of 101.25, the US Dollar Index (DXY) is trading near 101.55 at the time of writing, down 0.34%. The index measures the Greenback against a basket of six major currencies.

With market participants having already priced in a Democratic victory in both chambers of the federal legislature, the US Dollar had lagged over the past few weeks.

October’s US ADP Employment Change release, due at 13:15 GMT, will be the next focus for investors. The US agency is expected to report 69K new private-sector jobs, down from September’s 90K.

Also on the agenda later in the day is October’s US ISM Services PMI. Financial markets expect a reading of 54.8, slightly below the previous 54.9.

NZD/USD Remains Under Pressure Below Short-Term EMA

Trading at 0.5601 on the daily chart, NZD/USD retains a bearish near-term bias beneath the 20-period exponential moving average (EMA) of 0.5645. This short-term EMA continues to cap the pair, suggesting that recovery attempts are likely to face difficulty while spot stays below it. Meanwhile, a Relative Strength Index (RSI) reading of 37 points to continuing downward pressure, although it has not reached oversold extremes.

The 20-period EMA near 0.5645 provides the first resistance level. Only a sustained move above it would ease the prevailing bearish bias and open the way for a more substantial recovery. On the downside, the pair has key support at its 18-month low of 0.5564; a decisive breach of 0.5564 would leave 0.5500 exposed.

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