NZDUSD is climbing again after the recent pullback deflected off the 200-day simple moving average (SMA). The price is currently attempting to pierce above its 20-day SMA just beneath the 0.6350 mark, while to the downside, there is immediate support from the 38.2% Fibonacci retracement of the February 2021-October 2022 downtrend at 0.6257, as well as the 200-day SMA slightly lower.
The momentum indicators suggest today’s rebound has scope to stretch further in the coming days. The stochastics are rising as they recover from the oversold region, while the RSI is headed north, moving away from neutral territory.
If the pair successfully overcomes the 20-day SMA, there is likely to be further resistance in the 0.6500 region where the 50% Fibonacci resides. The next critical barrier is the 61.8% Fibonacci at 0.6717 and even higher, buyers could face difficulty near the 78.6% Fibonacci of 0.7045, which proved a sticking point back in April.
However, if the 20-day SMA holds and the upside momentum loses steam, the price is likely to again seek support from the 200-day SMA, currently at 0.6237. Should this defence break, the pair could dip towards the 50-day SMA at 0.6124, after which, the bears would turn their attention to the 23.6% Fibonacci of 0.5972. If this is breached too, there would be little to stop the pair from revisiting October’s two-and-and-a-half-year low of 0.5510 and resume the longer-term downtrend.
Summing up, the latest uptrend remains intact for now and surpassing the December top of 0.6512 is essential for reinforcing the medium-term bullish outlook. But if the pair continues to consolidate and drifts towards its 50-day SMA, the positive picture would be at risk of turning neutral.
