The NZDUSD pair attracts some dip-buying near the 0.5985 region on Friday and hits a nearly two-month high during the early European session. The pair is currently placed just below mid-0.6000s and is now looking to build on the momentum further beyond the 100-day SMA.

the markets are still pricing in a greater chance of a 50 bps Fed rate hike move at the next policy meeting in December. This, in turn, could help ease the bearish pressure surrounding the buck and cap the upside for the NZDUSD pair, at least for now. Moreover, the lack of strong follow-through buying warrants some caution for bullish traders. Nevertheless, spot prices remain on track to register gains for the fourth successive week.

Even so, the upbeat RSI (14) conditions, not overbought, join the quote’s sustained trading beyond a one-month-old ascending trend line to keep the buyers hopeful of overcoming the 0.6020 immediate DMA hurdle.

Following that, a run-up towards the downward-sloping resistance line from April, around 0.6155 can’t be ruled out. Also acting as an upside filter is July 2022 bottom surrounding 0.6060.

It’s worth noting that the quote’s trading beyond the aforementioned multi-month-old resistance line appears doubtful considering the RSI line’s positioning near the overbought zone.

That said, the quote’s break of 0.6155 hurdle will not hesitate to challenge the 200-DMA hurdle surrounding 0.6290.

Alternatively, pullback remains elusive unless the quote stays beyond the aforementioned support line, near 0.5825.

Even if the quote drops below 0.5825, the early October swing high near 0.5815 and the 0.5800 round figure could challenge the NZDUSD bears before directing them to the yearly low of 0.5511.

The Trendline can cause a temporary bearish momentum

Nov 12 2022