NZD/USD Price Analysis: Bulls struggle to find acceptance above the 38.2% Fibonacci/200 EMA

• The NZD/USD pair has pulled back from the one-month highs reached on Monday, although it lacks continuity.
• The prevailing risk averse environment is seen as a key factor weighing on the risk sensitive Kiwi.
• The technical situation continues to favor the bulls and supports prospects for further gains.

The pair NZD/USD it falls back from maximums of more than a month, around the 0.6280 zone touched at the beginning of this Monday, and maintains its offer tone for the North American session. The pair is currently sitting just below the 0.6250 zone, down more than 0.35% on the day, and continues its fight to decisively break the 0.6260-0.6270 confluence barrier.

This barrier comprises the 200 day EMA and the 38.2% Fibonacci retracement level of the February-March dip. Given that the oscillators on the daily chart have only just started to gain positive traction, a sustained move beyond will be seen as a new trigger for bullish traders. This, in turn, will set the stage for an extension of the NZD/USD pair’s recent rally from the year low, around the 0.6085 region touched earlier this month.

Spot prices could recover to 0.6300, which coincides with the 50% Fibonacci level. The bullish trajectory could extend further and lift the NZD/USD pair towards the 61.8% Fibonacci level around the 0.6360 zone, on the way to the next major hurdle just before the 0.6400 round level. That being said, the current risk-off environment could discourage bulls from making aggressive bets on a risk-sensitive kiwi.

On the other hand, any significant pullback towards the 0.6200 round signal or the 23.6% Fibonacci level could be considered a buying opportunity and is more likely to remain limited, at least for now. That being said, a convincing break below could negate the positive outlook and shift the short-term bias back in favor of the bears. The NZD/USD pair could then accelerate the decline towards the intermediate support of 0.6135-0.6125 before finally falling to 0.6100.

Continuation of selling below the 0.6085 zone, or last year’s low, could make spot prices vulnerable and challenge the 0.6000 psychological signal. The bearish trajectory could extend further towards the 0.5945 support zone on the way to the 0.5900 round figure and the next relevant support near the 0.5870-0.5860 zone.

NZD/USD daily chart

Key levels to watch