NZD/USD Price Analysis: Recovery from YTD low stalls near descending channel hurdle

NZD/USD struggles to capitalize on its recovery from the YTD low touched this week.
Bulls face rejection near the top boundary of over a one-month-old descending channel.
The mixed oscillators on hourly/daily charts further warrant caution for bullish traders.

Haresh Menghani FXStreet

The NZD/USD pair edges lower during the Asian session on Thursday and erodes a part of the previous day's strong move up to a one-week high. The pair currently trades around the 0.5970 region, down nearly 0.15% for the day, and is weighed down by a modest US Dollar (USD) uptick.

In fact, the USD Index (DXY), which tracks the Greenback against a basket of currencies, stalls the overnight sharp pullback from a more than two-month high, though lacks bullish conviction. The flash US PMI prints released on Wednesday showed that business activity in the world's largest economy approached the stagnation point in August and raised questions if the Fed can afford to increase interest rates further. This, in turn, might keep a lid on the USD and lend some support to the NZD/USD pair.

From a technical perspective, the recent recovery from sub-0.5900 levels, or a fresh low since November 2022 touched last week, fails near a resistance marked by the top boundary of over a one-month-old descending channel. The said barrier, currently around the 0.5985 region, is closely followed by the 0.6000 psychological mark, or the 100-period Simple Moving Average (SMA) on the 4-hour chart, which should act as a pivotal point and help determine the near-term trajectory for the NZD/USD pair.

Meanwhile, oscillators of the daily chart are still holding deep in the negative territory and make it prudent to wait for a sustained breakout through the said hurdles before positioning for any further gains. Spot prices might then climb to the next relevant hurdle near the 0.6065 zone en route to the 0.6100 mark. Some follow-through buying beyond the 0.6115-0.6120 supply zone should pave the way for an extension of the NZD/USD pair's upward trajectory witnessed over the past week or so.

On the flip side, the 0.5930 region is more likely to protect the immediate downside ahead of the 0.5900 round-figure mark. Some follow-through selling has the potential to drag the NZD/USD pair toward the trend-channel support, currently pegged near the 0.5830-0.5825 region. A convincing break below the latter will be seen as a fresh trigger for bearish traders and set the stage for deeper losses.

NZD/USD 4-hour chart

Technical levels to watch

NZD/USD

Overview
Today last price	0.5971
Today Daily Change	-0.0009
Today Daily Change %	-0.15
Today daily open	0.598

Trends
Daily SMA20	0.6037
Daily SMA50	0.6138
Daily SMA100	0.6159
Daily SMA200	0.6229

Levels
Previous Daily High	0.5987
Previous Daily Low	0.5927
Previous Weekly High	0.5997
Previous Weekly Low	0.5903
Previous Monthly High	0.6413
Previous Monthly Low	0.612
Daily Fibonacci 38.2%	0.5964
Daily Fibonacci 61.8%	0.595
Daily Pivot Point S1	0.5942
Daily Pivot Point S2	0.5905
Daily Pivot Point S3	0.5883
Daily Pivot Point R1	0.6002
Daily Pivot Point R2	0.6024
Daily Pivot Point R3	0.6062

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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