- NZD/USD struggled to capitalize on the post-NZ GDP gains to over one month tops.
- Overbought RSI on 4-hourly charts seemed to be the only factor that capped gains.
- A sustained strength beyond the 0.7100 mark is needed to confirm a bullish bias.
The NZD/USD pair surrendered a major part of its upbeat NZ CPI-led gains to one-month tops and was last seen trading in the neutral territory, around the 0.7075-80 region.
A cautious mood around the equity markets was seen as a key factor that acted as a headwind for the perceived riskier kiwi amid a subdued US dollar price action. This, along with disappointing Chinese macro data, weighed on antipodean currencies and contributed to the intraday decline.
From a technical perspective, the uptick faltered near a resistance marked by a descending trend-line extending from YTD tops touched in February. The mentioned barrier coincides with the very important 200-day SMA, around the 0.7100 mark and should act as a pivotal point for short-term traders.
Meanwhile, technical indicators on the daily chart are holding comfortably in the bullish territory and support prospects for an extension of last week's strong move up. That said, slightly overbought RSI on hourly charts seemed to be the only factor that prompted some profit-taking.
Nevertheless, the near-term bias remains tilted in favour of bullish traders. Hence, any meaningful pullback might be seen as a buying opportunity. This should help limit the downside near 100-day SMA, around the 0.7020-15 area, which is followed by 50-day SMA near the 0.7000 psychological mark.
That said, bulls are likely to wait for a sustained strength beyond the 0.7100 confluence hurdle before placing aggressive bets. The NZD/USD pair might then climb to September monthly swing highs, around the 0.7155-60 region, before aiming to reclaim the 0.7200 round-figure mark.
NZD/USD daily chart
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Technical levels to watch
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