NZD/USD Price Forecast: Focus shifts to 0.5850 support area as risk appetite fades

The New Zealand Dollar (NZD) slipped against the US Dollar (USD) for a second day on Tuesday due to uncertainty surrounding the US-Iran peace talks and the increased price of Oil, which supports the US Dollar. The NZD/USD pair is currently oscillating within the past fortnight's trading range, but the emphasis has shifted to the 0.5850 support level, previously a resistance point at 0.5900.

In the United States, upbeat remarks from Cleveland Federal Reserve (Fed) President Beth Hammack mitigated the adverse effects from the weak US Nonfarm Payrolls report on Monday, offering some support to the US Dollar. However, investor sentiment remains uncertain due to inconclusive expectations of the outcome of the September Fed meeting.

With the US Consumer Prices Index (CPI) report scheduled for release on Wednesday, it is expected to offer more clarity on the central bank's near-term rate direction. The NZD/USD pair remains within a tight band below 0.5900, but technical indicators point to dwindling bullish momentum, which has shifted the focus towards the channel's bottom near the 0.5850 level.

The 14-period Relative Strength Index (RSI) on the daily chart is close to 59, while the Moving Average Convergence Divergence (MACD) displays moderate positive values, albeit the dwindling histogram indicates that bulls are losing momentum. Bears are likely to encounter substantial obstacles at the specified 0.5850 support area, as well as at the convergence of the key 200-day Simple Moving Average (SMA) with the uptrend support line, located around 0.5825.

A breach of the late-July lows, near 0.5760, would confirm a trend reversal. On the upside, initial resistance is anticipated at the 78.6% Fibonacci retracement level of June's selloff, at 0.5916, prior to the May and June highs near 0.6000.