- Anxiety ahead of the US inflation data has dragged the asset from the psychological resistance of 0.6000.
- Overall optimism in the market may provide support to the asset around the 20-EMA.
- The RSI (14) is still oscillating in the bullish range, which indicates that the upside momentum is still intact.
The NZDUSD pair has turned sideways after failing to cross the immediate hurdle of 0.5960 in the Tokyo session. The risk profile has turned quiet as investors have shifted to the sidelines ahead of the US inflation data.
The US dollar index (DXY) is displaying topsy-turvy moves around 109.70 and is expected to remain on the tenterhooks. Going forward, the outcome of the US mid-term elections and the release of the US inflation will provide a decisive action in the currency market.
On a four-hour scale, the asset is auctioning in a Rising Channel pattern that indicates an upside structure. The upper portion of the chart pattern is placed from October 12 high at 0.5716 while the lower portion is plotted from October 13 low at 0.5512.
The asset has witnessed selling pressure after attempting a break above the psychological resistance of 0.6000. And, the decline move is basically a mean-reversion move and is expected to find support around the 20-period Exponential Moving Average (EMA) at 0.5918. The 50-EMA at 0.5868 is still advancing, which adds to the upside filters.
Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in a bullish range of 60.00-80.00, which indicates that the upside momentum is active.
A corrective move to near the 20-EMA at 0.5918 will present an entry opportunity for the smart money, which will drive the asset towards the psychological resistance of 0.6000, followed by August 29 low at 0.6100.
On the contrary, a downside move below Monday’s low at 0.5863 will put the Greenback bulls in the driving seat and will drag the asset towards the round-level support of 0.5800. A slippage below the latter will open room for more downside towards Thursday’s low at 0.5741.
NZDUSD hourly chart
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