NZDUSD turned green after printing a doji candlestick around 0.6050 last Thursday, currently aiming to extend its winning strike above the 0.6200 round level.
The latest rebound in the price has confirmed a higher low in the short-term picture, increasing hopes for a bullish trend reversal. The RSI has bounced back above its 50 neutral mark and the MACD has ticked above its signal and zero lines, both revealing improving market sentiment. Yet, whether the pair has enough fuel in the tank to pierce through the nearby trendline territory of 0.6280-0.6300 remains to be seen.
Specifically, an extension above the simple moving averages and the 0.6200 level could bring the key trendline from April 2022 at 0.6280 and the support trendline from October’s 31-month low at 0.6300 under examination. Breaking that constraining zone, the price could immediately get squeezed around the February-May wall of 0.6380. If not, then the bullish wave might expand towards the 0.6500-0.6550 constraining zone. Notably, the price could re-challenge the long-term descending trendline from March 2021 within the same region.
Alternatively, a pullback below the 20-day simple moving average (SMA) could initially pause near last week’s floor of 0.6060. Moving lower, the pair might retest the 0.6000 psychological level before tumbling towards the tentative support line at 0.5940. The 0.5840 territory could be the next destination.
In brief, although the short-term risk seems to be leaning on the positive side, NZDUSD will need to climb above the trendline zone of 0.6280-0.6300 to boost buying confidence.
