NZDUSD weakens sharply after the FOMC, losing 2% in two days

Ben Graham · Setembro 18

The Kiwi’s slide has been one that hasn't been seen in a while, with NZDUSD dropping 2% in just two sessions.

The pair had initially climbed ahead of the FOMC, driven by dovish concerns around the Fed and sudden Dollar-hedging that briefly pressured the DXY (sending the US Dollar down, hence the pair shooting upwards).

However, Powell’s balanced tone quickly flipped that narrative, erasing the priced-in dovishness observed in the SEP, dot plot, and FOMC statement.

“You can think of this, in a way, as a risk management cut,” Powell noted, striking a cautious stance around future cuts that steadied the USD.

There are still 25 bps of cuts priced at each of the two meetings left in 2025.

Strong US Jobless Claims (231k vs 240K exp) this morning reinforced that shift, further fueling a V-shaped reversal in the greenback.

Coupled with New Zealand’s atrocious GDP miss (-0.9% vs -0.3% q/q), the Kiwi was left in dismay, driving the pair sharply lower.

The current move is reflecting the repricing of more cuts for the RBNZ as the data has been very volatile for New Zealand throughout the year.

Expectations for a rate cut at the RBNZ upcoming meeting were at 82% last week and a 25 bps cut is now fully priced, with some extra premium in case of a larger 50 bps.

The NZ OCR is at 3% and the upcoming meeting will be happening on October 8th.

Let's have a look at NZDUSD through a multi-timeframe outlook to see where this takes the major pair.

A parenthesis on the DXY chart: Look at its V-Shape reversal since yesterday!

Screenshot 2025-09-18 at 10.02.46 AM — DXY 1H Chart, September 18, 2025 – Source: TradingView

NZDUSD 8H Chart

Screenshot 2025-09-18 at 9.45.47 AM — NZDUSD 8H Chart, September 18, 2025 – Source: TradingView

The downward shaping RSI right ahead of the FOMC was well located: Prices reached the 0.60 resistance before getting slammed lower as the Powell press-conference started.

RSI has shot down lower catching up with the ongoing move – The selling is showing no pity to the bulls, with prices consolidating slightly at the 0.59 Support which got swiftly broken.

Some immediate but small scale mean-reversion is stopping the descent, but the price action is brutal.

NZDUSD 2H Chart

Screenshot 2025-09-18 at 9.51.43 AM — NZDUSD 2H Chart, September 18, 2025 – Source: TradingView

At its extreme, the ongoing move downwards is of about 1350 pips or 2.25% in the pair from peak to trough.

Particularly after very slow FX trading, such data officially reinstores volatility for the end of this year.

Get ready to see more volatile data and price swings for NZDUSD and other pairs looking forward.

Levels to watch for in NZDUSD trading:

Resistance Levels

Immediate Resistance 0.60
0.5950 Main Pivot now Resistance
200-period MA 0.59150

Support Levels

0.59 (+/- 150 pips) Support (broken)
Current session lows 0.58725
September lows 0.58330
0.58 Key Support

Watch for further volatile swings looking forward and stay in touch with the latest data as every central banks will be looking at the news for their decision-making.

The Dollar index is reaching an interesting level and NZDUSD is taking a breather, stay locked in for upcoming action.

Safe Trades!

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