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Rebounds around 50 pips from multi-day lows, focus remains on Powell’s speech

  • NZD/USD once again finds decent support near the 0.60 confluence support.
  • The set-up warrants some caution before placing aggressive directional bets.

The NZD/USD pair has managed to rebound over 50 pips from the key 0.60 psychological mark and recover a major part of the post-RBNZ losses to multi-day lows. The mentioned level marks an important confluence support comprising of 50-day SMA and the lower end of an ascending trend-channel extending from late March.

This should now act as a key pivotal point for short-term traders as the focus now shifts to the Fed Chair Jerome Powell’s speech on current economic issues. Meanwhile, mixed technical indicators on hourly/daily charts warrant some caution for aggressive traders and before positioning for the pair’s near-term direction.

Hence, it will be prudent to wait for some strong follow-through buying, possibly beyond the 0.6075-80 region, in order to confirm any near-term bullish bias.

On the flip side, a sustained breakthrough the 0.60 confluence support might now be seen as a fresh trigger for bearish traders and pave the way for further decline. The pair might then turn vulnerable to accelerate the slide further towards 0.5945 intermediate support en-route the next major support near the 0.5900 round-figure mark.

NZD/USD daily chart

Techincal levels to watch

 

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