- NZD/USD rises due to more likelihood of a dovish policy stance by the Fed in the September meeting.
- MACD suggests that the short-term trajectory is favoring a sideways trend.
- The previous week’s bottom emerges as the initial support aligned to the 0.5850 psychological level.
- The key barrier level is represented by the 21-day Exponential Moving Average (EMA) at 0.5947.
NZD/USD extends gains in the third trading session, trading higher around 0.5930 during the Asian session on Monday as a result of the retreat in the US Dollar (USD). This pair is experiencing upward support due to the reduced likelihood of the US Federal Reserve (Fed) maintaining unchanged interest rates in the upcoming September meeting.
The Moving Average Convergence Divergence (MACD) line remains below the centerline but is positioned above the signal line. This configuration suggests that the recent momentum in the market is relatively subdued and moving sideways.
The pair may encounter initial support at the previous week’s bottom at 0.5859 level lined up with the 0.5850 psychological level. A decisive break below this level could potentially lead to further downward movement, with Kiwi bears targeting the region near the 0.5800 psychological level.
On the upside, a significant resistance level for the NZD/USD pair is represented by the 21-day Exponential Moving Average (EMA) at 0.5947, which is closely aligned with the 0.5950 psychological level.
If the pair manages to break convincingly above this level, it could potentially open the door for further upward movement, with the next target being the region around the 23.6% Fibonacci retracement level at 0.5980.
In the near term, the NZD/USD pair is expected to maintain a bearish outlook as long as the 14-day Relative Strength Index (RSI) remains below the 50 level. This suggests a continued downward momentum in the pair.
NZD/USD: Daily Chart