NZD/USD has been thrashed since the start of the US-Iran war, amid heavy concerns about energy supply in the Land of the Kiwi.
At the beginning of 2026, the New Zealand Dollar was on a powerful run. Traders priced higher odds for rate hikes, while most other Central Banks were priced for pauses and cuts. Since then, pricing has dramatically shifted.
Numerous policymakers now hint at incoming rate hikes to diminish the inflationary impact of 60% rises in Oil prices.
Having lost some relative strength, the new Governor Anna Breman failed to forecast a significant hawkish turn that had been anticipated by Market participants earlier in the year – You can access her recent Speech right here.
Having missed its Q4 GDP data, released in mid-March, traders quickly began pricing out any signs of heating in the NZ economy.
Combine these factors with a gigantic rise in the Petrodollar since March, and traders got exactly what they needed to not only take profits on previous bullish views but also reverse them into a bearish trend – the major pair is down 4.75% since.
The upcoming meeting is strongly priced for a pause (about 90% odds).
However, traders have priced in 60 basis points of hikes for the rest of the year.
Given the turn in fundamentals and upcoming event, the drops in NZD/USD might just be over.
Traders will focus on New Zealand macro data and especially the Royal Bank’s inflation outlook for the next meeting (May 27, 2026).
Combine high odds of more hawkish communications with daily bullish divergences (see below), and the NZD/USD could be poised for a decent upside reversal – The rest will be to see if it leads to a proper uptrend.
To prepare for the upcoming key RBNZ meeting this evening, it is appropriate to conduct a multi-timeframe analysis of NZD/USD and assess potential scenarios.