- NZD/USD defends the previous day’s corrective bounce off 12-day-low amid China-inspired risk-on mood.
- Sustained break of 200-EMA, upbeat RSI keeps Kiwi buyers hopeful.
- One-week-old descending trend line guards immediate upside ahead of 100-EMA, 50% Fibonacci retracement’s convergence.
- Multiple supports, pre-Fed positioning will challenge Kiwi pair sellers.
NZD/USD remains on the front foot for the second consecutive day but lacks upside momentum amid mixed catalysts. That said, the Kiwi pair prints mild gains around 0.6215 heading into Tuesday’s European session.
A clear run-up beyond the 200-Exponential Moving Average (EMA) joins the market’s risk-on mood to propel the Kiwi prices.
Also read: S&P500 Futures struggle to justify optimism in China, Hong Kong amid sluggish yields, pre-Fed anxiety
Adding strength to the NZD/USD upside momentum is the upbeat RSI (14) line, not overbought, as well as the market’s positioning for Wednesday’s Federal Open Market Committee (FOMC) monetary policy meeting announcements.
With this, the NZD/USD buyers are all set to cross a two-week-old descending resistance line, around 0.6225. However, a convergence of the 100-EMA and 50% Fibonacci retracement level, around 0.6230 by the press time, appears a tough nut to crack for the Kiwi bulls afterward.
In a case where the NZD/USD remains firmer past 0.6230, the odds of witnessing a run-up towards a fortnight-old horizontal resistance area surrounding 0.6300-6310 can’t be ruled out.
On the flip side, the 200-EMA level of around 0.6200 restricts the immediate downside of the Kiwi pair.
Following that, an ascending support line from July 06 and 78.6% Fibonacci retracement, respectively near 0.6160 and 0.6125 in that order, will test the NZD/USD bears.
NZD/USD: Four-hour chart
Trend: Further upside expected