• NZD/USD failed to hold onto gains as Fed officials maintain a cautious stance on inflation and interest rates.
• Geopolitical uncertainty surrounding Iran supported demand for the US Dollar in the American session.
• Markets await the US Nonfarm Payrolls report, due later in the day, for fresh clues on the Fed's policy outlook.

The NZD/USD pair trades near the 0.5870 level on Friday, as the United States Dollar (USD) remains supported by cautious Federal Reserve (Fed) commentary and safe-haven demand amid ongoing uncertainty surrounding Iran.

Kansas City Fed President Jeff Schmid said that inflation remains the biggest risk facing the US economy and raised the possibility that the Fed may need to consider higher interest rates if price pressure fails to return to target. Meanwhile, San Francisco Fed President Mary Daly reiterated that getting inflation back to 2% remains the central bank's top priority, reinforcing expectations that policymakers will remain patient before considering rate cuts.

Short-term technical analysis:

On the 4-hour chart, NZD/USD trades at 0.5867, maintaining a bearish near-term bias as it remains below both the 20- and 100-period Simple Moving Averages (SMAs) at 0.5901 and 0.5888, respectively. The pair also sits under a tight band of horizontal resistance clustered between 0.5878 and 0.5888, while the Relative Strength Index (RSI) around 35 suggests lingering downside pressure rather than a decisive recovery.

On the topside, initial resistance is seen at 0.5878, followed by 0.5881, with the 100-period SMA and a horizontal cap converging around 0.5888 to form a stronger barrier, ahead of the 20-period SMA at 0.5901. Only a break above this zone would ease the current bearish tone. On the downside, immediate support emerges at 0.5865, where a horizontal level underpins the pair, and a clear break below this floor would open the door to further weakness in the short term.

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