- NZD/USD struggled to capitalize on last week’s modest recovery from over a two-year low.
- A three-week-old descending trend-channel hurdle capped the upside amid a stronger USD.
- The downside seems cushioned ahead of the RBNZ and the US CPI report on Wednesday.
The NZD/USD pair faced rejection near the top end of a three-week-old descending channel and for now, seems to have stalled its modest bounce from over a two-year low touched last week.
Expectations for more aggressive rate hikes by the Fed assisted the US dollar to regain strong positive traction on the first day of a new week. Apart from this, the prevalent risk-off environment – amid recession fears - lifted the safe-haven buck back closer to a two-decade high and acted as a headwind for the risk-sensitive kiwi.
The downside, however, remains cushioned, at least for the time being, as traders seemed reluctant to place aggressive bets ahead of this week's key event/data risk. The Reserve Bank of New Zealand will announce its decision on Wednesday, which will be followed by the latest US consumer inflation figures.
From a technical perspective, a convincing break through the descending channel resistance will suggest that the NZD/USD pair has formed a near-term bottom and pave the way for additional gains. The next relevant hurdle is pegged near the 0.6245-0.6250 region, or the 100-period SMA on the 4-hour chart.
Some follow-through buying will reaffirm a near-term bullish breakout and allow bulls to aim back to reclaim the 0.6300 round-figure mark. The momentum could further get extended and push the NZD/USD pair further towards the 0.6325 supply zone.
On the flip side, the 0.6135-0.6130 region, or the YTD low, might continue to protect the immediate downside ahead of the 0.6100 round-figure mark. This is followed by the descending channel support, currently around the 0.6075 region, which if broken would be seen as a fresh trigger for bearish traders and set the stage for further losses.
NZD/USD 4-hour chart
Key levels to watch
|Today last price||0.617|
|Today Daily Change||-0.0030|
|Today Daily Change %||-0.48|
|Today daily open||0.62|
|Previous Daily High||0.6223|
|Previous Daily Low||0.6132|
|Previous Weekly High||0.6253|
|Previous Weekly Low||0.6124|
|Previous Monthly High||0.6576|
|Previous Monthly Low||0.6197|
|Daily Fibonacci 38.2%||0.6188|
|Daily Fibonacci 61.8%||0.6167|
|Daily Pivot Point S1||0.6147|
|Daily Pivot Point S2||0.6094|
|Daily Pivot Point S3||0.6056|
|Daily Pivot Point R1||0.6238|
|Daily Pivot Point R2||0.6275|
|Daily Pivot Point R3||0.6328|
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