The New Zealand dollar (NZD) showed early strength against the US dollar (USD) on Tuesday, following a breakout above the key 0.60 resistance level seen on Monday.
However, the pair reversed course and gave back some of those gains by the end of the session, signaling uncertainty about a sustained upward move.
A daily close above 0.6060 would be a bullish sign, encouraging buying with a target near 0.6350 and a stop loss set at 0.5880. The 0.60 level has been a strong resistance point, and breaking above it could mark a significant shift in momentum.
Recently, a “golden cross” occurred, where the 50-day moving average crossed above the 200-day moving average, indicating potential upward momentum, though this alone does not guarantee a major market move.
If the pair falls from current levels, support is expected down to around 0.5850. While a breakdown could offer short-selling opportunities, other currency pairs might provide better profit potential due to a longer downward trend.
Conversely, if the US dollar weakens broadly, NZD/USD could be an attractive buy, especially since the NZD has been under pressure for several years, making this a possible longer-term trade.
Market watchers also note that the NZD/USD has been trading above 0.6010 amid ongoing USD weakness. However, upcoming US jobs data and tariff tensions between the US and China could cause volatility. The Federal Reserve’s cautious stance on interest rates adds to the uncertainty.
Technical indicators suggest the pair may consolidate between 0.5985 and 0.6030 in the short term. A break above 0.6135 would confirm a bullish breakout, potentially pushing the pair toward 0.6265. On the downside, a drop below 0.5905 could signal further declines.
Overall, the NZD/USD remains at a critical juncture, with traders watching closely for confirmation of either a sustained rally or a pullback.
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