NZD/USD Price Analysis: Needs acceptance above 0.6200 for further rally
- NZD/USD has shown a recovery move to near 0.6200 despite the NZ economy reporting a technical recession.
- Fed Powell confirmed that rate cuts are not appropriate this year.
- NZD/USD faced sheer resistance near the 61.8% Fibonacci retracement at 0.6230.
The NZD/USD pair has rebounded after sensing buying interest near 0.6160 in the early London session. The Kiwi asset is struggling to find acceptance above the round-level resistance of 0.6200 despite multiple attempts.
S&P500 futures have generated more losses as the market sentiment is turning cautious. A skip in the interest rate regime by the Federal Reserve (Fed) lacks optimism as the policy-tightening spell is not concluded now. Also, Fed chair Jerome Powell confirmed that rate cuts are not appropriate this year.
Meanwhile, the New Zealand economy has reported a technical recession as quarterly Gross Domestic Product (GDP) has contracted by 0.1% as expected. Also, the Kiwi economy reported a contraction in its former GDP figures by 0.7%. Two consecutive time contraction in quarterly GDP figures of an economy is considered a technical recession.
NZD/USD faced sheer resistance near the 61.8% Fibonacci retracement (plotted from May 11 high at 0.6385 to May 31 low at 0.5985) at 0.6230 on a four-hour scale. The downward-sloping trendline placed from May 11 high at 0.6385 will continue to provide support to the New Zealand Dollar bulls. Also, the 20-period Exponential Moving Average (EMA) at 0.6161 is acting as a cushion for the Kiwi bulls.
The Relative Strength Index (RSI) (14) is making efforts in keeping its auction in the bullish range of 60.0-80.00.
A confident break above the round-level resistance at 0.6200 will drive the Kiwi asset toward May 17 high at 0.6261 followed by May 19 high at 0.6306.
Alternatively, a downside move below the intraday low at 0.6015 will expose the asset for a fresh six-month low toward 11 November 2022 low at 0.5984. A slippage below the latter would expose the asset toward 02 November 2022 high at 0.5941.
NZD/USD four-hour chart
