The foreign exchange market is a dynamic and ever-evolving market that never ceases to amaze traders and investors. In this world of constant change, the New Zealand Dollar (NZD) and the US Dollar (USD) have been going through their own share of ups and downs. In the early hours of Tuesday, the NZD/USD currency pair was seen trading around the 0.6300 level, with a corrective bounce from the 0.6270 support confluence. Despite this, the sustained trading below the 50-day Exponential Moving Average (EMA) has kept sellers hopeful, as they await a clear break below the 0.6340 immediate resistance.
What’s next for the Kiwi pair?
To answer that, we need to understand the technical picture behind the NZD/USD currency pair. At present, the bearish trend that has been in place for the past three days seems to be taking a breather, but that does not necessarily mean that the Kiwi is in for a bullish run. Instead, it’s a mere corrective bounce, and for the bearish trend to be reversed, the NZD/USD must break above the 0.6340 immediate resistance.
In the case of an upside break, the 0.6400 and 0.6500 levels may offer intermediate resistance before challenging the bearish formation, the rising wedge, by attacking its upper trendline, which is currently located around 0.6545. However, if the NZD/USD currency pair manages to close above 0.6545, it could propel prices toward June 2022 high near 0.6575, and the 0.6600 level could become the next target for the bulls.
On the other hand, if the NZD/USD closes below the key support at 0.6270, it would confirm the bearish chart pattern and could set the stage for a potential slump towards sub-0.6000 levels. During this potential fall, the mid-November 2022 low near 0.6065, and the psychological level of 0.6000, could act as intermediate support levels.
In conclusion, the NZD/USD pair continues to see a volatile and corrective trade, as it hovers around the 0.6300 round figure amid bearish market sentiment. The Kiwi pair’s sustained trading below the 50-day EMA, coupled with the negative signals from downbeat oscillators, has kept the bears hopeful.
However, this latest rebound could be a sign of a possible upward trend, but it will only be confirmed if the NZD/USD pair surpasses the 0.6340 immediate hurdle and moves towards the 0.6400 and 0.6500 round figures. These intermediate targets may offer some resistance, but a run-up beyond the 0.6545 level, the top line of the bearish rising wedge pattern, could propel prices towards June 2022 high near 0.6575.
On the other hand, if the NZD/USD pair fails to break the resistance levels, the bears will be back in control, and the Kiwi pair could see a daily closing below the key support of 0.6270. This could trigger a sell-off, putting the base for a theoretical slump towards the sub-0.6000 levels. The mid-November 2022 low near 0.6065 and the 0.6000 psychological magnet could act as intermediate support during this anticipated fall.