NZD/USD Price Analysis: Shifts below 0.6200 as negative sentiment improves US Dollar’s appeal
- NZD/USD has shifted its auction comfortably below 0.6200 amid negative market sentiment.
- Consideration of a pause in the rate-hiking spell by other global central banks has provided the Fed a level-field playing.
- NZD/USD has registered a vertical decline and has slipped heavily below the 61.8% Fibo retracement at 0.6216.
The NZD/USD pair is showing back-and-forth action below the round-level resistance of 0.6200 in the early Tokyo session. Earlier, the Kiwi asset showed a perpendicular downside move as inventors run for the US Dollar Index (DXY) due to growing uncertainty.
The US Dollar Index (DXY) is looking for further gains above 102.73 as other global central banks are also considering a halt in the policy-tightening process to avoid further calamity, which is providing a level field to the safe-haven.
Going forward investors will remain focused on the development of United States debt-ceiling talks, which are expected on Tuesday. Further delay in raising the US borrowing cap will fuel the risk of default in obligated payments by the US Treasury.
NZD/USD has registered a vertical decline and has slipped heavily below the 61.8% Fibonacci retracement (placed from April 26 low at 0.6117 to May 11 high at 0.6385) at 0.6216 on an hourly scale. The 10-period Exponential Moving Average (EMA) at 0.6200 is acting as a barricade for the New Zealand Dollar bulls.
The Relative Strength Index (RSI) (14) is oscillating in the bearish range of 20.00-40.00, signaling further weakness ahead.
Going forward, a breakdown of May 12 low at 0.6182 will further drag the asset toward May’s low at 0.6160 followed by April 26 low at 0.6117.
In an alternate scenario, a recovery move above 61% Fibo retracement at 0.6216 would strengthen the New Zealand Dollar. An occurrence of the same will allow the Kiwi asset to move higher towards 50% and 38.2% Fibo retracements at 0.6248 and 0.6280 respectively.
NZD/USD hourly chart
Author
Sagar Dua
FXStreet
Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.
