The NZD/USD pair builds on the previous day's goodish rebound from the 0.6140-0.6135 area and gains strong follow-through traction for the second successive day on Friday. The pair maintains its bid tone through the early North American session, albeit seems to struggle to capitalize on the move and remains below the 0.6260-0.6270 confluence hurdle, or the weekly high.
The said barrier comprises the 200-day Exponential Moving Average (EMA) and the 38.2% Fibonacci retracement level of the February-March downfall. Given that oscillators on the daily chart have just started gaining positive traction, a sustained move beyond will be seen as a fresh trigger for bullish traders and set the stage for an extension of the NZD/USD pair's recent recovery from the YTD low touched last week.
The subsequent move-up could then allow spot prices to reclaim the 0.6300 round-figure mark, which coincides with the 50% Fibo. level. The momentum could get extended further and lift the NZD/USD pair towards the 61.8% Fibo. level, around the 0.6360 region, en route to the next relevant hurdle just ahead of the 0.6400 round-figure mark.
A fresh wave of the global risk-aversion trade, however, holds back bulls from placing aggressive bets around the risk-sensitive Kiwi and capping the NZD/USD pair. Nevertheless, the technical setup supports prospects for some meaningful upside. Hence, any pullback towards the 0.6200 round-figure mark, or the 23.6% Fibo. level might still be seen as a buying opportunity and is more likely to remain limited, at least for now.
That said, a convincing break below the latter might negate the positive outlook and shift the near-term bias back in favour of bearish traders. The NZD/USD pair might then accelerate the fall towards the 0.6135-0.6125 intermediate support before eventually dropping to the 0.6100 mark. Some follow-through selling below the 0.6085 area, or the YTD low, could make spot prices vulnerable to challenge the 0.6000 psychological mark.
Material posted here is solely for information purposes and reliance on this may lead to losses. Past performances are not a reliable indicator of future results. Please read our full disclaimer.
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