NZDUSD advanced to a seven-week high of 0.6378 in the wake of a bolder-than-expected 50bps rate hike by the Reserve Bank of New Zealand early on Wednesday.
The pair has been developing northwards within a bullish channel since the drop to 0.6083 on March 10th, having already climbed above its simple moving averages (SMAs). Encouragingly, the RSI and the MACD are sending clear positive signals at the moment, with the former trending up confidently above its 50 neutral mark and the latter gaining ground within the positive region.
The next hassle could be the channel’s upper boundary, which overlaps with the 61.8% Fibonacci retracement of the latest downleg at 0.6392. A successful move higher could retest the 0.6465 constraining zone ahead of the 2023 top of 0.6536. Should the bulls push for new highs, the door would open for the long-term resistance trendline drawn from the 2021 high of 0.7463.
If selling pressures resurface, the price may initially seek support within the key 0.6270-0.6255 region, where the 50-day SMA, the 38.2% Fibonacci level, and the falling constraining line from March 2021 lows are located. The channel’s lower boundary and the 20-day SMA are within a breathing distance at 0.6233, while the tentative ascending trendline from March lows could also come under consideration near the 23.6% Fibonacci of 0.6190 before the focus turns to the 200-day SMA at 0.6155. Another failure here could squeeze the price towards the previous low of 0.6080.
In a nutshell, NZDUSD is positively charged in the short-term picture. A decisive extension above 0.6392 could renew bullish pressures.
