NZD/USD technical analysis: Retraces under 50-day SMA; positive signals intact

NZDUSD has faded below the 50-day simple moving average (SMA) from a fresh seven-month high of 0.6714, somewhat stalling the bullish picture. However, the strengthening 50- and 100-day SMAs coupled with a forthcoming bullish crossover of the 200-day SMA by the 100-day one, may rapidly guide the pair higher again.

The short-term oscillators are transmitting mixed signals of momentum at the moment. The MACD and its red signal line are currently flirting with the neutral mark. On the other hand, the stochastic oscillator has shifted positive with a bullish overlap from the %K line, while the rising RSI has reached the 50 threshold.

To the upside, if buyers manage to nudge above the capping 50-day SMA at 0.6558, some friction could occur from the mid-Bollinger band at 0.6582, prior to encountering the 0.6651 obstacle. Slightly overhead, a resistance band of highs from 0.6689 to 0.6714, which encompasses the upper Bollinger band, may dismiss the climb. Should buyers prevail, the 0.6754 and 0.6789 peaks from December and July 2019 respectively, may challenge the ascent towards the 0.6940 crucial barrier.

If sellers re-emerge, initial support may come from the lower Bollinger band located at the 0.6487 nearby low. Slipping under this may send the pair to the 0.6419 level, that being the 23.6% Fibonacci retracement of the up leg from 0.5468 to 0.6714. Not far beneath, a hardened support zone involving the 0.6378 trough and the bullish crossover between the 200- and 100-day SMAs at 0.6367 may terminate the decline.

Summarizing, a short-term bullish bias continues to control the market with positive sentiment looking unbroken above 0.6378.