The NZD/USD pair is pulling back after reaching a weekly high around the 0.5965–0.5970 level and is currently trading near 0.5920, marking a new daily low. The release of New Zealand's budget has influenced the market, though the pair's decline is somewhat cushioned by a pause in U.S. dollar selling.

The New Zealand government displayed fiscal prudence by forecasting a narrower budget deficit for the next fiscal year. While this could be seen as a positive signal, fiscal caution is also taking place amid economic challenges and trade uncertainty, increasing the likelihood of further rate cuts by the Reserve Bank of New Zealand (RBNZ). These factors are pressuring the New Zealand dollar and, consequently, the NZD/USD pair.

On the other hand, the bias against the U.S. dollar persists due to concerns over the U.S. budget and potential consequences of President Trump's new legislative proposals. The market is also pricing in a possible rate cut by the Federal Reserve, which weakens the dollar and helps limit losses for the New Zealand dollar in the NZD/USD pair.

Nevertheless, NZD bulls should exercise caution due to renewed trade tensions between the U.S. and China. China has accused the U.S. of abusing export control measures and violating the Geneva Trade Agreements after the U.S. issued guidance warning companies against using Huawei Ascend AI chips. The escalation in tensions and China's accusations could reduce demand for risk-sensitive currencies such as the New Zealand dollar. This introduces additional risks for investors and calls for caution when considering market entries or opening long positions on the NZD/USD pair.

From a technical standpoint, oscillators remain in positive territory, confirming the still-bullish outlook. However, if the pair drops below the 200-day Simple Moving Average (SMA), the probability will shift in favor of the bears.