NZD/USD Price Forecast: Flirts with ascending trend-line near 0.5900 as traders eye RBNZ
The NZD/USD pair attracts some sellers following a modest intraday uptick to the 0.5930 region and languishes near the lower end of its daily range during the early European session on Tuesday. Bearish traders now await a break below the 0.5900 mark before positioning for an extension of the recent pullback from the vicinity of the 0.6000 psychological mark, or a three-month high touched in August.
The US Dollar (USD) regains positive traction as traders continue to price in a greater chance of a US Federal Reserve (Fed) rate hike in September amid inflation risks stemming from rising energy prices. Adding to this, a further escalation of tensions between the US and Iran is seen as another factor underpinning the safe-haven Greenback, exerting some downward pressure on the NZD/USD pair.
The downside, however, seems cushioned as traders might refrain from placing aggressive bets and opt to wait for the Reserve Bank of New Zealand (RBNZ) policy meeting on Wednesday. The focus will then shift to the closely watched US monthly jobs data, popularly known as the Nonfarm Payrolls (NFP) report on Friday. Apart from this, geopolitical headlines should provide some impetus to the NZD/USD pair.
From a technical perspective, an intraday breakdown below the 100-period Simple Moving Average (SMA) on the 4-hour chart could be seen as a key trigger for bearish traders. Moreover, the Moving Average Convergence Divergence (MACD) indicator remains marginally below zero and the Relative Strength Index (RSI) hovers in the mid-30s, which together hint at fading bullish momentum after the latest recovery.
However, the NZD/USD pair is holding above the 200-period SMA at 0.5876, leaving the near-term bias neutral but capped by nearby overhead supply. Furthermore, the upward-sloping trend-line reference around 0.5900 still underpins price action, making it prudent to wait for a break below the said handle before positioning for a slide to the 200-period SMA at 0.5876, where buyers could defend the broader uptrend.
On the topside, initial resistance is defined by the 100-period SMA at 0.5915, and a sustained break above this barrier would be needed to re-open a more constructive path for the NZD/USD pair.
NZD/USD 4-hour chart
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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