• NZD/USD jumps to near 0.5770 as the New Zealand Dollar gains on a risk-on mood.
• Upbeat NZ Q3 GDP data failed to lift RBNZ hawkish bets.
• The US Dollar drops despite slim Fed dovish bets for the January meeting.

The NZD/USD pair trades 0.25% higher to near 0.5770 during the early European trading session on Monday. The Kiwi pair regains ground after revisiting an almost three-week low near 0.5736 on Friday amid improved risk sentiment.

However, the upside in the New Zealand Dollar (NZD) seems to be capped as market expectations for a Reserve Bank of New Zealand (RBNZ) interest rate hike have diminished, despite the release of the better-than-projected New Zealand (NZ) Q3 Gross Domestic Product (GDP) data.

The probability of the RBNZ hiking its Official Cash Rate (OCR) in the July 2026 meeting has diminished to 40% from 50% seen before the Q3 GDP data release.

Stats NZ reported on Thursday that the economy grew at a faster pace of 1.1% compared to estimates of 0.9%. In the second quarter, the economy declined by 1%.

Meanwhile, a slight corrective move in the US Dollar (USD) has also strengthened the Kiwi pair. The US Dollar Index (DXY) trades slightly lower to near 98.60, even as traders remain confident that the Federal Reserve (Fed) will not cut interest rates in the January policy meeting.

NZD USD technical analysis

NZD/USD trades higher around 0.5769 at the start of the week. The pair holds above the rising 20-day Exponential Moving Average (EMA) at 0.5757, preserving a short-term upside bias. The 20-day EMA has been tilting higher for several sessions, continuing to support dips. RSI at 55 (neutral) is nudging up, keeping momentum mildly positive.

A sustained hold above the 20-day EMA would keep the recovery intact. The path for further gains would open if the price breaks above the December 11 high at 0.5832. Whereas, the price could lose ground if it breaks below Friday's low of 0.5735.

With the Relative Strength Index (RSI) shy of 60 and away from overbought, bulls have room to press higher. A retreat toward the 50 midline would warn of loss of traction.

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