The NZD/USD pair is retreating towards the 0.57 support level amidst a risk-off market sentiment triggered by recent weak US economic data and rising long-term inflation expectations. A weak US Flash Services PMI and a surge in the University of Michigan's Consumer Sentiment survey's long-term inflation expectations to a 30-year high have fueled concerns that the Federal Reserve may be slow to cut rates despite persistent inflation.
On the New Zealand side, the Reserve Bank of New Zealand (RBNZ) implemented a 50 bps interest rate cut as anticipated. However, Governor Orr's less dovish tone indicated a potential slowdown in the pace of easing as the central bank nears its estimated neutral rate.
Technically, the NZD/USD pair is testing the 0.57 support. A break below this level could lead to further declines towards 0.55, while a hold could see a rally towards 0.5850. Market participants are also watching an upward trendline on the 4-hour chart, with potential buying interest expected near this level. Upcoming US Consumer Confidence data, Jobless Claims, and PCE data will be closely monitored.