NZD/USD Price Analysis: Moves toward a three-month high, trades above 0.6050
- NZD/USD gains ground as the market prices out the possibility of any rate hike by the Fed.
- Technical indicators suggest a bullish sentiment to revisit the three-month high aligned with the 0.6100 psychological level.
- A decisive break below 0.6050 could lead the pair to navigate the 23.6% Fibonacci retracement.
NZD/USD surges as markets factor out the likelihood of additional interest rate hikes by the Fed. The NZD/USD pair trades higher around 0.6060 during the European session on Thursday.
The market participants seem to price out the chance of any further rate hike by the Fed. This development initiates a new downward trend in US Treasury bond yields. Coupled with a steady performance in the equity markets, this undermines the safe-haven appeal of the US Dollar (USD).
The 14-day Relative Strength Index (RSI) is above the 50 level, indicating a bullish sentiment for the NZD/USD pair. This could encourage bulls of the pair to revisit the three-month high at 0.6086 followed by the 0.6100 psychological level.
Moreover, the Moving Average Convergence Divergence (MACD) line, situated above the centerline and diverging above the signal line, is a confirmation of bullish momentum in the market.
On the downside, a break below the major support level of 0.6050 could push the pair to fall to the 23.6% Fibonacci retracement at 0.6010, which may serve as a crucial support level lined up with the nine-day Exponential Moving Average (EMA) at 0.6007.
A decisive break below the nine-day EMA could potentially pave the way for the NZD/USD pair to test the 38.2% Fibonacci retracement at 0.5964, aligning with the psychological support region at 0.5950 level.