NZD/USD Price Analysis: Kiwi bounces off, eyes on 20-day SMA resistance

NZD/USD bounced off from the critical 100 and 200-day SMA convergence at 0.6070.
The Kiwi's outlook tilts positive as the pair tests the pivotal 20-day SMA level.

Patricio Martín FXStreet

On Wednesday, the NZD/USD witnessed a gain of 0.50%, as markets turned their back on the USD. Now testing the important 20-day Simple Moving Average (SMA) threshold at 0.6125, the pair rebounded off the crucial convergence of the 100 and 200-day Simple Moving Averages (SMAs) at 0.6070 mark. The pair's future course now hinges on whether the currency pair manages to conquer the mentioned 20-day SMA.

Regarding the daily technical indicators, the Relative Strength Index (RSI), now resting at 50, portrays an improvement in bullish momentum. However, it has further ground to gain to confirm a bullish bias. The Moving Average Convergence Divergence (MACD) continues to print decreasing red bars, depicting a neutral to bearish stance, but overall positive as bears lose strength.

NZD/USD daily chart

The NZD/USD establishes immediate support near the 0.6070 threshold, aligned with the mentioned convergence point of the 100 and 200-day SMAs. Therefore, if the sellers manage to drive the price below it, it could enhance selling pressure and indicate a deeper retracement. Further support resides at the 0.6050 level.

On the flip side, resistance currently hovers around the 20-day SMA at 0.6125 level. If the buyers manage to navigate through, additional resistance lies at the 0.6170 mark, followed by a significant barrier at 0.6200. A decisive break above these resistance levels could end the bearish dominance and steer the pair into bullish territory.

Author

Patricio Martín

FXStreet

Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.

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