- The greenback bulls surrendered their control after the RSI (14) indicated signs of exhaustion.
- Kiwi bulls are firmer above 20-EMA and are expected to tap the 200-EMA.
- The trendline placed from 0.6805 will act as a major barricade.
The NZD/USD pair is gently moving higher in the Asian session. The pair is expected to extend gains as it has overstepped Monday’s high at 0.6320. Kiwi bulls are dominating the greenback for the last two trading sessions after the major found a firmer rebound from Friday’s low at 0.6217.
On an hourly scale, kiwi bulls look firmer above the 20-period Exponential Moving Average (EMA) at 0.6294. The kiwi bulls are expected to tap the 200-EMA at 0.6333. The trendline placed from April 21 high at 0.6805 will act as a major barricade for the counter.
A rebound in the asset was witnessed after the formation of a Bullish Divergence on the asset. The asset formed a lower low on a continuous basis while the momentum oscillator, Relative Strength Index (RSI) (14) made a higher low, which indicates signs of exhaustion in the downtrend.
Also, the RSI (14) has shifted into a bullish range of 60.00-80.00, which indicates a firmer rally going forward.
A minor pullback towards the 20-EMA at 0.6294 will be a bargain buy for the market participants. This may drive the asset higher towards the trendline at 0.6330 followed by the round level resistance at 0.6400.
Alternatively, the greenback bulls could regain control if the asset drops below Friday’s low at 0.6225. This will drag the asset towards the 13 May 2020 high of 0.6098. A slippage below the 13 May 2020 high will expose the asset to a low to near the psychological support of 0.6000.
NZD/USD hourly chart
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