NZDUSD has been in a recovery mode since Monday when the pair triggered some buy orders near the 0.6125 territory, an area around which the pair changed hands several times since the summer. Today, the recovery accelerated, adding around 1.5% worth of gains to the pair, but given that it is still trading below the plotted exponential moving averages, the outlook could still be neutral.
The RSI rebounded from near the 30 line, while the MACD, although below both its zero and trigger lines, is showing signs of bottoming as well. Both indicators detect slowing negative momentum and suggest that the rebound may continue for a while longer.
However, for the near-term picture to turn overly positive, a break above the strong resistance zone of 0.6540 may be needed. That territory has been acting as a ceiling since May 2022, while it offered support on January 20, 2022. If the bulls are strong enough to climb above that zone, they could then decide to shoot for the 0.6720 or 0.6815 zones, marked by the inside swing low of April 18 and the high of April 20, respectively.
The bears could take the driver’s seat if the NZDUSD slips below 0.6125. Such a dip will confirm a lower low on the daily chart and may see scope for declines all the way down to the low of November 10 at 0.5840, or the low of November 3 at 0.5740.
To sum up, NZDUSD has seen a strong recovery this week from near the key support territory of 0.6125. However, as long as it remains below the 0.6540 resistance zone, it is hard to envision an overly bullish outlook.
