NZD/USD Price Analysis: Intraday positive move falters near 0.6200, bearish bias remains
|- NZD/USD staged modest recovery from the YTD low and snapped a two-day losing streak.
- A positive risk tone prompted some USD profit-taking and benefitted the risk-sensitive kiwi.
- The technical setup supports prospects for an extension of a well-established bearish trend.
The NZD/USD pair gained some positive traction on Wednesday and moved away from the YTD low touched earlier this week. The uptick assisted spot prices to snap a two-day losing streak, though lacked bullish conviction and stalled just ahead of the 0.6200 round-figure mark.
A slight recovery in the global risk sentiment prompted some profit-taking around the safe-haven US dollar and extended support to the risk-sensitive kiwi. That said, the prospects for more aggressive Fed rate hikes helped limit the USD downfall and capped gains for the NZD/USD pair.
Looking at the broader picture, the recent decline witnessed over the past three weeks or so has been along a downward sloping channel and points to a well-established short-term bearish trend. Moreover, bearish oscillators on the daily chart are still away from being in the oversold territory.
The technical set-up suggests that any subsequent move up might still be seen as a selling opportunity and runs the risk of fizzling out quickly. Hence, any subsequent move up is likely to remain capped near the descending channel resistance, currently around the 0.6225 region.
The said barrier is followed by the 0.6260 supply zone, which now coincides with the 100-period SMA on the 4-hour chart and should act as a key pivotal point. Sustained strength beyond would indicate that the NZD/USD pair has formed a near-term bottom and trigger a short-covering move.
On the flip side, the 0.6135-0.6125 region (YTD low) now seems to protect the immediate downside ahead of the descending channel support, just ahead of the 0.6100 mark. A convincing break below would be seen as a fresh trigger for bearish traders and pave the way for further losses.
NZD/USD 4-hour chart
Key levels to watch
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