August 3rd Chart of the Week: NZD/USD Weekly Technical Analysis

New Zealand’s labor market has shown signs of gradual cooling, with the unemployment rate sitting at 5.3% in the early part of the year. Against this economic backdrop, the Household Labor Force Survey data scheduled for release on Tuesday, August 4, at 10:45 PM EDT (Please check your local date/time) is expected to reflect further moderation in employment growth.

According to Bloomberg’s economic calendar, forecasts indicate that quarterly employment change will slow to 0.1%—down from the previous quarter’s 0.2%—while the overall unemployment rate is projected to tick upward to 5.4%. An upside surprise in these figures would signal persistent labor market tightness and potentially support the New Zealand Dollar (NZD). In contrast, an inline or weaker result would reinforce softening conditions, suggesting a dovish-leaning RBNZ.¹

According to the latest data released by Stats NZ on July 21, 2026, New Zealand’s annual inflation rate accelerated to 4.1% in the June 2026 quarter (Q2), up from 3.1% in the March quarter and pushing above the Reserve Bank of New Zealand’s (RBNZ) 1% to 3% target band.

The Consumer Price Index (CPI) rose 1.5% quarter-on-quarter, primarily driven by sharp increases in fuel and transport costs—such as petrol and diesel—which contributed nearly one-quarter of the total annual inflation rate. Housing and utility expenses also added upward pressure, with electricity prices rising 12% and local authority rates increasing 8.8%.

Excluding volatile fuel prices, annual inflation would have remained within target at 2.9%; however, with over 80% of items in the CPI basket seeing price increases, the broad-based price pressure complicates the path toward further RBNZ monetary easing. ²

Scheduled for release on Tuesday, August 4, at 10:00 AM EDT, the U.S. Job Openings and Labor Turnover Survey (JOLTS) for June is expected to show a gradual cooling in employer labor demand. According to the Bloomberg economic calendar, consensus forecasts project job openings to decline slightly to 7.501 million from May’s 7.594 million, bringing the job openings rate down from 4.6% to 4.4%, while the voluntary quits level is expected to remain nearly flat at 3.064 million.³

For global markets and the Federal Reserve, a print in line with or below expectations would confirm easing of labor market tightness, reduce wage pressures, and bolster the case for a more dovish monetary policy, which could weigh on the U.S. Dollar.

Conversely, an upside surprise in openings would signal persistent economic resilience, dialing back rate hold expectations and giving the dollar a temporary boost.

The U.S. Nonfarm Payrolls (NFP) report scheduled for release on Friday, August 7, at 8:30 AM EDT, is expected to show modest job growth in July, with consensus projections pointing to an increase of 85,000 jobs, up from 57,000 in the previous month. Meanwhile, underlying indicators point to broad stabilization across the labor market: the unemployment rate is projected to hold unchanged at 4.2%, monthly wage growth is expected to maintain a steady 0.3% rate (3.5% year-over-year), average weekly hours are set to remain at 34.3, and the labor force participation rate is anticipated to tick up slightly to 61.6%.

As a marquee benchmark for Federal Reserve policy decisions, a result that matches or exceeds these expectations would confirm labor market resilience, whereas a downside surprise could heighten concerns about an economic slowdown and fuel market expectations for a more dovish approach.⁴

The commitment of traders report as of 07/31/2026 (Includes data up to the end of day, Tuesday, July 28th, 2026) reflects the following:

• The Commitments of Traders (COT) net positions reveal how positioning was impacted in July 2026 as the Reserve Bank of New Zealand (RBNZ) initiated its rate-hiking cycle (raising the OCR to 2.50% on July 8, 2026).

• The most notable change was in asset managers’ and institutional positioning, as their net short expansion flattened in July 2026, aligning with the RBNZ’s decision.

• The report highlights a significant divergence in institutional flows: Dealer/Intermediary (Commercials) net long exposure has reached an all-time historical extreme. At the same time, Asset Manager/Institutional and Leveraged Funds remain anchored at all-time net short extremes. This structural polarization suggests a potential exhaustion of the prevailing bearish trend, as commercial hedging demand at these levels typically precedes a mean-reversion.

According to the report, long positions held by asset managers and institutions have reached a 3-year extreme, placing them very close to an all-time high, following a distinct period of sideways trading throughout July 2026. Concurrently, short positions held by dealers and intermediaries have reached a 3-year intermediate extreme, then moved sideways during July 2026.

• The weekly chart illustrates NZD/USD continuing to trade inside a macro consolidation structure defined by the long-term “2014 falling wedge” overhead red resistance trendline and a lower converging red support trendline.

• As of October 2024, price action continued to trade within a narrowing formation as marked by the blue support and resistance lines. Within the formation, price action made higher lows supported by RSI and Stochastics.

• In late February and early March of 2026, two downward gaps are highlighted on the chart: one is a potential exhaustion gap, as it followed a long-term downward trend, and the other occurred at market open as the Middle East war began.

• As of early July 2026, price action traded higher after finding support above the narrowing formation’s lower border (Blue line). The upward trend took the price above its annual PP of 0.5787 and its monthly PP of 0.5814, and the fast EMA9, SMA9, and the intermediate SMA21. These levels are currently acting as a confluence of support below price action.

• Immediate Resistance Levels: Monthly Resistance 1 (R1): 0.59707; blue descending resistance trendline (0.59800–0.60000 zone); Monthly Resistance 2 (R2): 0.60523; Yearly Resistance 1 (R1): 0.60892; upper red falling wedge line.

• Immediate Support Levels: 21-week MA: 0.58182; Monthly Pivot Point (P): 0.58143; 9-week EMA: 0.58104; Yearly Pivot Point (P): 0.57872; 9-week MA: 0.57780; Monthly Support 1 (S1): 0.57327; lower red support line (0.56500 zone); Monthly Support 2 (S2): 0.55763; Yearly Support 1 (S1): 0.54539.

• RSI (14): Positioned at 53.26 with its signal line at 49.22, pushing back above the 50 neutral mark to indicate improving mid-term bullish momentum.

• Stochastic (14, 1, 3): The Fast %K line (71.45) has crossed above the Slow %D line (58.34), accelerating upward to signal strengthening momentum within the weekly range.

Synthesizing the prevailing market structure and technical indicators, the NZD/USD outlook maintains a neutral-to-bullish bias within its macro consolidation. While the pair remains confined by long-term wedge resistance, the successful reclamation of the 50 RSI level and the bullish Stochastic crossover signal strengthen mid-term momentum. Price action is currently sustained by a robust confluence of support at the 0.57800.5820 zone (comprising the weekly EMA9, SMA9, SMA21, and critical Pivot Points).

A decisive weekly close above the blue descending trendline (0.59800.6000) would suggest a structural shift toward mean-reversion, potentially targeting Yearly R1 at 0.6089. Conversely, a breach of the 0.5787 Yearly PP would invalidate the immediate bullish thesis, refocusing attention on the lower red support boundary near 0.5650.

Abbreviation Key:

EMA: Exponential Moving Average | SMA: Simple Moving Average | RSI: Relative Strength Index | PP: Pivot Point | S: Support | R: Resistance

Footnotes

¹ https://www.bloomberg.com/markets/economic-calendar

² https://www.stats.govt.nz/information-releases/consumers-price-index-june-2026-quarter/

³ https://www.google.com/url?q=https://www.bloomberg.com/markets/economic-calendar&sa=D&source=docs&ust=1785766993476426&usg=AOvVaw0qzjwf38P4pE84I1MhwBvH

⁴ https://www.bloomberg.com/markets/economic-calendar