NZD/USD Price Analysis: Struggles to make it through 100-SMA hurdle near 0.5650 on H4
The NZD/USD pair gains positive traction for the second straight day on Thursday, building on the previous day's recovery from the 0.5575 area, or a three-week low.
The New Zealand Dollar (NZD) against the US Dollar (USD) has experienced a slight setback on Thursday, struggling to surpass a key 100-period Simple Moving Average (SMA) near 0.5650 on the 4-hour chart. This follows the Reserve Bank of New Zealand's (RBNZ) decision to maintain the Official Cash Rate (OCR) at 2.75% during their recent meeting, which was deemed a "major dovish surprise" by traders.
The broader US Dollar Index (DXY) saw a fresh low since late September as the outcome of the recent US midterm elections raised concerns about potential fiscal gridlock. This, coupled with hopes for the end of the Iran war, exerted pressure on crude oil prices, easing inflation fears and weakening the USD. Despite this, the NZD may face difficulty in attracting strong follow-through buying, as traders may choose to wait for the release of crucial US monthly employment data on Friday.
Technical indicators suggest a short-term negative bias for the NZD/USD pair after the breakdown near the 100-period SMA and a recent easing of the Relative Strength Index (RSI). However, a sustained break below the 0.5580-0.5570 support level could signal further downside momentum. An immediate resistance level for the pair is located at the 100-period SMA around 0.5649, followed by the 23.6% Fibonacci retracement at 0.5664.
A clear break above these levels might open the path to test higher Fibonacci resistance at 0.5725 (38.2%) and 0.5775 (50%).
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