NZD/USD faces tough challenge near 7-month high [Video]

Stefanos Oikonomidis XM

NZDUSD had experienced a steep downtrend in 2022, posting a 31-month low of 0.5510 in early October. However, the pair has staged a substantial rebound since then, which seems to be running out of steam slightly below the recent seven-month high of 0.6528.

The momentum indicators currently suggest that buying forces are subsiding but remain in control. Specifically, the RSI is pointing downwards above its 50-neutral mark, while the MACD histogram is softening but holds above both zero and its red signal line.

If buying pressures intensify, the price could test its recent resistance region of 0.6528, which is also a seven-month high. Conquering this barricade, the bulls could then aim for the June peak of 0.6575 before 0.6812 appears on the radar. A break above the latter could set the stage for the 2022 high of 0.7032.

On the flipside, should the pair reverse lower, the recent support of 0.6364 could act as the first line of defense. Violating that zone, the price may descend towards 0.6305 or lower to test the 2023 low of 0.6190. Failing to halt there, any further declines could cease at the November support of 0.6063.

Overall, despite the latest weakness, NZDUSD seems ready to storm to fresh highs as the short-term oscillators are promoting a bullish near-term picture. Therefore, a clear jump above the 0.6528 could signal the resumption of the pair’s advance.

Author

Stefanos Oikonomidis

Stefanos joined XM as a Junior Investment Analyst in September 2021. He conducts daily market research on the currency, commodity and equity markets, from a fundamental and a technical perspective.

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