NZD/USD market analysis: RBNZ rate decision, FOMC minutes, and US PCE data (May 27, 2025)

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Reserve Bank of New Zealand (RBNZ) Rate Decision

Traders are closely monitoring the RBNZ meeting scheduled for Tuesday, May 27, 2025. Market consensus, based on Bloomberg analyst surveys, strongly anticipates a 25 basis point (bps) rate cut, bringing the official cash rate to 3.25%. This follows a previous 25 bps cut in April. Further RBNZ rate cuts are possible in 2025 due to global trade uncertainties and potential economic slowdowns. The recent New Zealand Employment Change Q/Q showed a 0.1% increase, as expected, though the previous quarter's data was revised downward. The New Zealand Unemployment Rate remained steady at 5.1%, better than the 5.3% forecast.

Federal Open Market Committee (FOMC) Minutes and US Data

The release of the FOMC Minutes for the May 6/7 meeting on Wednesday can be significant for NZD/USD. Traders will seek insights into FOMC members' views on tariff impacts, inflation expectations, and the potential for slow growth and a weak labor market. The latest FOMC statement highlighted "risks of higher unemployment and higher inflation." Fed Chair Jerome Powell has emphasized prioritizing inflation over short-term growth. US Personal Income, Personal Spending, and Personal Consumption Expenditure (PCE) data are due Friday from the Bureau of Economic Analysis. The Core PCE Price Index M/M is expected to rise 0.1%, while the Y/Y is expected to decrease from 2.6% to 2.5%

NZD/USD Technical Analysis (May 27, 2025)

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NZD/USD Daily Chart - Source: Tradingview.com Past perfomance is not indicative of future results

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Widening Pattern: The NZD/USD pair has exhibited a "widening pattern" formation since early 2025.

Price Range: Influenced by global trade tariff updates, and following a dip to 0.5530 (the lower boundary of the widening formation), the NZD/USD exchange rate surged to 0.6000 (the upper boundary).

Sideways Trading Range: Since late April 2025, NZD/USD price action has been trading within a defined range of 0.5830 to 0.6000, indicated on charts by blue lines.

Key Resistance Levels: The current NZD/USD price is testing a significant confluence of resistance:

• Upper level of the current trading range (around 0.6000)
• Daily pivot point at 0.6004
• Weekly R1 resistance at 0.6025

Potential Breakout: A break and close above these resistance levels could signal a bullish continuation, potentially turning the current range into a "flag formation" for the uptrend initiated in early April.

Critical Support Levels: A critical support zone exists:

• Weekly pivot point at 0.5950
• Convergence of moving averages: EMA9, SMA9, and SMA20

Overbought Indicators:

• Stochastic Oscillator has been in overbought territory since April, aligning with price action.
• Relative Strength Index (RSI) is also approaching overbought levels, reflecting current price momentum.

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