NZD/USD Price Analysis: Extend its rally to three days though retreats from 0.6890 to 0.6860s

The New Zealand dollar slightly advances for the fourth day in a row, extending its weekly rally. On the day, the NZD/USD pair surges some 0.01%, exchanges hands at 0.6859 at the time of writing. The leading cause of the rally is broad US dollar weakness, according to Joel Frank, an analyst at FX Street, spurred “by a long-squeeze/bout of profit-taking, goes against recent fundamental developments that many would normally see as USD bullish.”

NZD/USD Price Forecast: Technical outlook

On Thursday, during the overnight session for North American traders, the NZD/USD was subdued around the 0.6840-60 region until mixed US macroeconomic data triggered another leg-up, reaching a daily high at 0.6890. The rally stalled at the 0.6900 figure, which confluences with a 38.2% Fibonacci retracement, drawn from November – December 2021 cycle high/lows, retreating above the 50-day moving average (DMA).

The NZD/USD first ceiling level is the 38.2% Fibonacci retracement. A breach of the latter will expose the 50% Fibonacci level at 0.6960, followed by the 61.8% Fibonacci retracement at 0.7019.

Conversely, NZD bull’s first line of defense would be the 0.6800 figure. A clear break of it will send the pair tumbling to the January 6 daily low at 0.6733, followed by 2021 yearly low at 0.6702.