- A successful test of the consolidation breakout will trigger a buying opportunity for the market participants.
- The 50-EMA is acting as major support for the New Zealand Dollar.
- The US Dollar lost strength as investors shrugged off uncertainty and channelized funds into risky assets.
The NZD/USD pair has picked demand after correcting below the crucial support of 0.6350 in early Asia. The Kiwi asset displayed a rebound on Wednesday after the US Dollar lost strength as investors shrugged off uncertainty and propelled reversal in risk-sensitive assets.
At the time of writing, the US Dollar Index (DXY) is facing barricades around 105.20. S&P500 remained choppy on Wednesday as accelerating recession fears capped the upside. The 10-year US Treasury yields have dropped to near 3.42%.
On an hourly scale, the kiwi pair is testing the breakout of the consolidation that placed in a range of 0.6300-0.6355. The 50-period Exponential Moving Average (EMA) at 0.6344 is acting as major support for the counter.
Meanwhile, the Relative Strength Index (RSI) (14) has dropped into the 40.00-60.00 range but that doesn’t resemble a reversal. The oscillator has lost upside momentum for now but may achieve this after stepping into the bullish range of 60.00-80.00.
Going forward, a break above Thursday’s high at 0.6372 will drive the kiwi asset towards Monday’s high at 0.6444, followed by December 1 high at 0.6477.
On the flip side, a break below the round-level resistance of 0.6300 will drag the asset towards November 29 high at 0.6254 and November 30 low at 0.6190.
NZD/USD hourly chart
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