- NZD/USD stages a strong recovery from three-week lows on Monday.
- The 0.6040 support-turned-resistance might cap any subsequent gains.
The NZD/USD pair continued scaling higher through the early North American session and refreshed daily tops in the last hour. The pair has now reversed the previous session’s negative move to three-week lows, with bulls now looking to build on the momentum further beyond the key 0.60 psychological mark.
The mentioned level marks 50-day SMA and is followed by a short-term ascending trend-channel support breakpoint, around the 0.6040 region. Meanwhile, bearish oscillators on 4-hourly/daily charts point to the possible emergence of some fresh selling near the mentioned support-turned-resistance zone.
Hence, it will be prudent to wait for some strong follow-through buying before confirming that the recent leg down is already over and positioning for any further near-term appreciating move. The pair might then aim to retest the 0.6150 supply zone en-route the 100-day SMA barrier, around the 0.6175 region.
On the flip side, the 0.5985-80 area now seems to protect the immediate downside, which if broken will add credence to the negative outlook and accelerate the slide further towards the 0.5920-10 region. A convincing break will set the stage for a further near-term downfall towards the 0.5860-50 zone.
NZD/USD daily chart
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Technical levels to watch
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