NZD/USD Price Analysis: Refreshes daily low, around 0.6120 area amid reviving USD demand
- NZD/USD once again fails near the 0.6155-0.6160 supply zone amid renewed USD buying.
- The mixed technical setup warrants some caution before placing aggressive directional bets.
- Some follow-through selling below the multi-month low will pave the way for deeper losses.
The NZD/USD pair meets with a fresh supply on the first day of a new week and extends its steady intraday descent through the first half of the European session. Spot prices drop to the 0.6120 region in the last hour and erode a part of Friday's positive move despite hawkish remarks by Reserve Bank of New Zealand (RBNZ) officials.
Testifying before the Finance and Expenditure Committee on Monday, Governor Adrian Orr highlighted that inflation remains elevated, which is why the RBNZ has maintained the cash rate at 5.5%. Adding to this, RBNZ Deputy Governor (Financial Stability) Christian Hawkesby noted that house prices have stabilized over the last six months, and the system is equipped to handle high interest rates. This, however, does little to provide any meaningful impetus to the NZD/USD pair amid the emergence of some US Dollar (USD) buying, bolstered by expectations that the Federal Reserve (Fed) will keep interest rates higher for longer.
From a technical perspective, the downfall reaffirms a stiff horizontal barrier near the 0.6155-0.6160 region, which should now act as a key pivotal point. Given that oscillators on the daily chart have been struggling to gain any meaningful traction, it will be prudent to wait for a sustained breakout through the said hurdle before positioning for any further gains. The NZD/USD pair might then accelerate the positive move towards the 0.6200 round figure and climb further towards the 0.6225-0.6230 horizontal resistance. The momentum could extend further towards the 0.6250-0.6260 supply zone, which if cleared will negate any near-term negative bias.
On the flip side, the 0.6100 mark now seems to protect the immediate downside ahead of the very important 200-day Simple Moving Average (SMA), currently pegged near the 0.6085 region. This is followed by the 0.6040-0.6035 region, or a multi-month low touched this February. A convincing break below the latter will be seen as a fresh trigger for bearish traders and drag the NZD/USD pair further towards the 0.6000 psychological mark.
NZD/USD daily chart
Technical levels to watch
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
