- The formation of a bullish divergence bolsters exhaustion signals.
- The 20-EMA is testing the strength of the kiwi bulls.
- Momentum oscillator RSI (14) has shifted in the 40.00-60.00 range.
The NZD/USD pair has displayed a volatility contraction as the asset is oscillating in a narrow range of 0.6280-0.6310 from the previous trading session. Earlier, the asset witnessed an extreme sell-off after slipping below the previous week’s low at 0.6394.
The greenback bulls are showing signs of exhaustion after a prolonged south move. A bullish divergence has been formed on an hourly scale that adds to the bullish reversal filters. The asset formed a lower low at 0.6276 while the momentum oscillator, Relative Strength Index (RSI) (14) denied forming a lower low, which shows exhaustion in the downtrend. The RSI (14) has shifted to a 40.00-60.00 range from a bearish range of 20.00-40.00 but seeks more validation.
The 20-period Exponential Moving Average (EMA) at 0.6303 is testing kiwi bulls’ strength and responsive buyers’ action to provide a green signal. While the 50-EMA at 0.6327 is still favoring the downside.
For a meaningful bullish reversal, kiwi bulls need to violate the trendline placed from near Monday’s high of 0.6372 at 0.6320. This will drive the asset towards Tuesday’s high and Wednesday’s high at 0.6349 and 0.6377, respectively.
On the flip side, kiwi bulls could lose support if the asset tumbles below Tuesday’s low at 0.6276. This will drag the asset towards the 28 May 2020 high at 0.6228, followed by the round level support at 0.6200.
NZD/USD hourly chart
-637878354689632572.png)
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD nears 1.0800 on broad US Dollar weakness
Optimism continues to undermine demand for the American currency ahead of the weekly close. EUR/USD hovers around weekly highs just ahead of the 1.0900 figure.
GBP/USD reconquers 1.2500 with upbeat UK GDP
Following BOE-inspired slump on Thursday, the British Pound changed course and trades around 1.2530. Better-than-anticipated UK GDP and a weaker USD behind the advance.
Gold resumes advance and trades above $2,370
XAU/USD accelerated its recovery on Friday, as investors drop the USD. Dismal US employment-related figures revived hopes for a soon-to-come rate cut from the Fed.
XRP tests support at $0.50 as Ripple joins alliance to work on blockchain recovery
XRP trades around $0.5174 early on Friday, wiping out gains from earlier in the week, as Ripple announced it has joined an alliance to support digital asset recovery alongside Hedera and the Algorand Foundation.
Week ahead – US inflation numbers to shake Fed rate cut bets
Fed rate-cut speculators rest hopes on US inflation data. After dovish BoE, pound traders turn to UK job numbers. Will a strong labor market convince the RBA to hike? More Chinese data on tap amid signs of slow Q2 start.