- NZD/USD gained strong traction for the fifth consecutive session on Tuesday.
- Sustained break through the 0.7100 confluence hurdle favours bullish traders.
- Overbought conditions warrant some caution before placing fresh bullish bets.
The NZD/USD pair continued scaling higher through the early European session and shot to over one-month tops, around the 0.7145-50 region in the last hour.
The safe-haven US dollar witnessed aggressive selling on Tuesday and sank to three-week lows amid the dominant risk-on flow. This, in turn, provided a strong boost to the perceived riskier kiwi and assisted the NZD/USD pair to gain strong follow-through traction for the fifth successive day.
The momentum confirmed a bullish breakout through the 0.7100 confluence, comprising the very important 200-day SMA and a descending trend-line extending from YTD tops touched in February. A subsequent move beyond the 50% Fibonacci level of the 0.7466-0.6805 downfall has set the stage for further gains.
Meanwhile, technical indicators on hourly charts are already flashing overbought conditions. Moreover, RSI on the daily chart has moved on the verge of breaking into the overstretched territory, warranting some consolidation or a modest pullback before the next leg up for the NZD/USD pair.
From current levels, September monthly swing highs, around the 0.7170 region, seems to act as immediate resistance. A sustained move beyond has the potential to push the NZD/USD pair towards the 0.7200 round-figure mark en-route the 61.8% Fibo. level, around the 0.7215-20 area.
On the flip side, any meaningful retracement slide could attract some dip-buying near the 0.7100 confluence hurdle breakpoint. This, in turn, should help limit the downside near the 0.7070-60 region, which coincides with the 38.2% Fibo. level and act as a strong base for the NZD/USD pair.
NZD/USD daily chart
Technical levels to watch
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
AUD/USD failed just ahead of the 200-day SMA
Finally, AUD/USD managed to break above the 0.6500 barrier on Wednesday, extending the weekly recovery, although its advance faltered just ahead of the 0.6530 region, where the key 200-day SMA sits.
EUR/USD met some decent resistance above 1.0700
EUR/USD remained unable to gather extra upside traction and surpass the 1.0700 hurdle in a convincing fashion on Wednesday, instead giving away part of the weekly gains against the backdrop of a decent bounce in the Dollar.
Gold keeps consolidating ahead of US first-tier figures
Gold finds it difficult to stage a rebound midweek following Monday's sharp decline but manages to hold above $2,300. The benchmark 10-year US Treasury bond yield stays in the green above 4.6% after US data, not allowing the pair to turn north.
Ethereum suffers slight pullback, Hong Kong spot ETH ETFs to begin trading on April 30
Ethereum suffered a brief decline on Wednesday afternoon despite increased accumulation from whales. This follows Ethereum restaking protocol Renzo restaked ETH crashing from its 1:1 peg with ETH and increased activities surrounding spot Ethereum ETFs.
Dow Jones Industrial Average hesitates on Wednesday as markets wait for key US data
The DJIA stumbled on Wednesday, falling from recent highs near 38,550.00 as investors ease off of Tuesday’s risk appetite. The index recovered as US data continues to vex financial markets that remain overwhelmingly focused on rate cuts from the US Fed.