NZD/USD Price Analysis: Lacks a clear directional bias around 0.6500
- NZD/USD remains on the backfoot as the USD clings to recent gains.
- China covid reopening optimism checks the downside in the spot.
- The kiwi is stuck in a tight range, with bulls eyeing 50-DMA this week.
NZD/USD is licking its wounds around 0.6500, as bulls lack a follow-through recovery momentum after getting thrashed on Friday.
The US dollar sprung back to life after Friday’s US labor market report showed bigger-than-expected jobs additions to the economy and softening wage-price pressures. The kiwi tumbled over a big figure in the NFP aftermath.
This Monday, bulls are trying their luck to stage a minor recovery, although bears keep fighting for control amid the upside consolidations in the dollar across its main peers.
The pair draws support from news that Beijing is set to reopen gradually from the COVID-19-induced restrictions this week.
Although the disappointing Chinese Caixin Services PMI contraction the renewed optimism. Meanwhile, holiday-thinned light trading also restricts the moves in the kiwi pair.
From a short-term technical perspective, NZD/USD is likely to extend its previous week’s range play between 0.6600 and 0.6450, with the bias leaning to the upside in the near term.
The 14-day Relative Strength Index (RSI) is inching slightly higher above the midline, keeping bulls hopeful.
On a buying resurgence, the pair could jump back towards Friday’s high of 0.6578, above which the critical downward-sloping 50-Daily Moving Average (DMA) at 0.6593 will be tested.
Acceptance above the latter is critical to unleashing the additional recovery.
NZD/USD: Daily chart
On the downside, the immediate cap is seen at the previous week’s low of 0.6467. The next strong support awaits at the mildly bullish 21-DMA at 0.6412.
Although the bears need to take out the 0.6450 psychological level before attacking the 21-DMA support.
NZD/USD: Additional levels to consider