The NZD/USD pair comes under fresh selling pressure on Tuesday and drops closer to a nearly three-month low touched the previous day. Spot prices manage to bounce back to mid-0.6100s during the first half of the European session, though the near-term bias remains tilted in favour of bearish traders.

The NZD/USD pair, meanwhile, now seems to have found acceptance below a technically significant 200-day Simple Moving Average (SMA). This adds credence to the near-term negative outlook and suggests that the path of least resistance for spot prices is to the downside. Traders now look to the US macro data - regional Manufacturing PMIs and the Conference Board's Consumer Confidence Index - for a fresh impetus.

Not only the upbeat candlestick formation but the oversold RSI (14) also suggests the NZD/USD pair’s upside past the immediate hurdle surrounding 0.6170.

The same highlights a downward-sloping resistance line from early February, around 0.6205 at the latest.

Following that, the 61.8% and 50% Fibonacci retracement levels of the pair’s run-up from late November 2022 to early February 2023, near 0.6245 and 0.6300 respectively, could challenge the NZD/USD buyers.

It’s worth noting that the previous support line from November 17, close to 0.6330 by the press time, acts as the last defense of the Kiwi bears.

Alternatively, a daily closing below the multi-day bottom marked on Monday, around 0.6130, will defy the bullish candlestick and can direct the NZD/USD sellers towards the mid-November swing low surrounding 0.6060.

It should, however, be observed that the Kiwi pair’s weakness past 0.6060 appears tough as multiple supports stand tall to challenge the sellers around the 0.6000 psychological manget.

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Feb 28 2023