NZD/USD Price Analysis: Kiwi needs to trespass 0.6350 for a bullish trend
- Weakness in the US Dollar Index is supporting a recovery in the kiwi asset.
- The Kiwi asset is holding above the 200-EMA, which indicates that the long-term upside bias is still solid.
- An oscillation in the 40.00-60.00 range by the RSI (14) indicates a consolidation ahead.
The NZD/USD pair is displaying back-and-forth moves around 0.6300 in the early Tokyo session. Earlier, the Kiwi asset attracted offers after failing to reclaim the critical hurdle of 0.6350. The New Zealand Dollar is expected to regain strength as the market mood has turned cheerful. Investors dumped the risk-aversion theme amid expectations of a further slowdown in the inflationary pressures in the United States.
The US Dollar Index (DXY) has shifted into a sideways profile and reacted less to the release of downbeat United States Manufacturing PMI and the Federal Open Market Committee (FOMC) minutes.
On a four-hour scale, the Kiwi asset witnessed a responsive buying action after dropping below December 22 low around 0.6230. The incident formed a Double Bottom chart pattern and a follow-up recovery underpinned the New Zealand Dollar. The major is focusing on holding itself above the 20-period Exponential Moving Average (EMA) at around 0.6300.
With solid efforts, the Kiwi asset has managed to sustain itself above the 200-period EMA at 0.6268, which indicates that the long-term trend is still bullish.
Meanwhile, the Relative Strength Index (RSI) (14) has also defended a drop into the bearish range of 20.00-40.00 and is continuously oscillating in the 40.00-60.00 range, which indicates a consolidation ahead.
Going forward, a further recovery above December 30 high at 0.6373 will drive the kiwi asst towards December 19 high at 0.6409. In case, the New Zealand Dollar pushes the asset above the latter, the major will march towards December 15 high at 0.6500.
Alternatively, with a break below the round-level support of 0.6200, the US Dollar will get stronger and will drag the major below November 28 low at 0.6155 followed by November 28 low at 0.6087.