NZDJPY Slips After Weak New Zealand GDP Data, Bearish Momentum Persists

NZDJPY pared some of its gains after weak New Zealand GDP data. Intraday trend remains bearish as long as the resistance at 88.20 holds. It hit an intraday low of 86.94; it presently trades at about 87.10. As long as the resistance at 89.20 remains intact, the general bearish trend is still valid.

In Q2 2025, New Zealand's economy contracted by 0.9%, significantly exceeding market predictions of a 0.3% decline and reversing the 0.9% growth from Q1. With annual GDP decreasing 0.6%, this is the third contraction in five quarters. Leading the decline was a 3.5% drop in manufacturing; construction dropped 1.8%; services stayed level overall with mixed subsector performance. Finance Minister Nicola Willis pointed to the drop in world uncertainty following US tariff declarations, which stifled business and customer confidence. With markets now pricing in 58 basis points of more cuts this year, the poor data encouraged hopes for further monetary easing by the Reserve Bank of New Zealand. Reflecting increasing expectations for policy easing, the New Zealand dollar fell 0.34% to $0.5942, and swap rates reached their lowest levels of 2025.

Technicals-

 The pair is trading below the 55 EMA, 200 EMA, and 365 EMA on the 1-hour chart.

The near-term resistance is around 87.40, breach above targets 88/88.20/89.20/90.  The immediate support is at 86.60; any violation below will drag the pair to 86/85.50/85.10/84.06.

Indicator (1-hour chart)

CCI (50)-  Bearish

Average directional movement Index-  Bearish. All indicators confirm a bearish trend.

It is good to sell on rallies around 87.38-40 with SL around 88 for TP of 85.