NZD/USD Price Analysis: Classic case of cup-and-handle highlights 0.6535 as the key hurdle
- NZD/USD picks up bids to pare intraday losses inside bullish chart formation.
- Looming bear cross on MACD, RSI retreat signal further pullback.
- 100-SMA puts a floor under the Kiwi price, bulls can aim for previous yearly top on sustained break of 0.6535.
NZD/USD licks its wounds near 0.6490 as it pares the intraday loss, the first in four days, during the mid-Asian session on Wednesday. In doing so, the quote justifies the RSI (14) retreat from the overbought territory, as well as the impending bear cross on the MACD.
Even so, the upbeat New Zealand inflation data and a cup-and-handle bullish chart formation on the four-hour play keep the Kiwi pair buyers hopeful.
That said, the quote’s latest weakness remains elusive unless breaking the 100-SMA support of 0.6380.
In a case where the NZD/USD pair drops below 0.6380, the bullish chart formation gets rejection, which in turn can drag the quote toward the monthly low near 0.6190. It should be noted that the 0.6300 round figure may offer an intermediate halt during the fall.
Alternatively, bulls need to portray a successful break of the 0.6535 hurdle to confirm the cup-and-handle chart pattern to theoretically aim for the previous yearly top surrounding 0.7035.
During the anticipated run-up, the mid-2022 peak near 0.6575 may act as buffer while the RSI conditions may challenge the NZD/USD bulls on the way to 0.7035.
NZD/USD: Four-hour chart
Trend: Pullback expected
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
