NZDUSD upside appears limited as the key week begins

30 thg 1, 2023

Be it New Zealand’s quarterly jobs report or China’s return after Lunar New Year (LNY) holidays, not to forget the Federal Reserve’s monetary policy meeting, NZDUSD has an interesting week ahead. However, the bulls appear running out of steam after a four-week winning streak. The reason could be linked to the overbought RSI and multiple attempts to cross the upward-sloping resistance line from early June, close to 0.6525 by the press time. Even if the quote manages to cross the 0.6525 hurdle, a nine-month-old horizontal resistance near 0.6570 will be crucial as a break of which opens the door for the north-run towards the 78.6% Fibonacci retracement level of the April-October downturn, around 0.6700.

Alternatively, the 61.8% Fibonacci retracement level, also known as the golden ratio, restricts the immediate downside of the NZDUSD pair around 0.6450. Following that, an ascending support line from early November, close to 0.6390, could act as the last defense for the Kiwi pair buyers. It should be noted that the quote’s weakness past 0.6390 could make it vulnerable to testing the 50% Fibonacci retracement level and the 200-DMA, respectively near 0.6270 and 0.6190.

Overall, NZDUSD has bright opportunities to take entries but it all depends upon fundamental data/events and hence a cautious move is advisable.