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NZD/USD Price Analysis: A correction pushes bulls below the 20- and 50-period EMAs, with 0.6100 providing crucial support
Loss of momentum close to 0.6100 has bolstered the positive case for the New Zealand dollar. The asset has abandoned the support of the 20- and 50-day exponential moving averages. In the future, the announcement of the RBNZ's interest rate decision will be of the highest importance.
The NZD/USD pair has had a weak performance since the first tick was printed in Tokyo. It appears that the drop from Tuesday's high of 0.6146 has been carried over to Wednesday ahead of the Reserve Bank of New Zealand's interest rate decision (RBNZ).
The greenback bulls have maintained their position of dominance throughout the previous month. Now, the dominating position is experiencing difficulties since the oscillators are emitting depletion signals. Continuously forming lower lows while the Relative Strength Index (RSI) (14) generated higher lows signals a lack of downward momentum and is known as a negative bullish divergence.
The decline from Tuesday's high of 0.6146 below the 20-period and 50-period Exponential Moving Averages (EMAs) at 0.6128 and 0.6134 has changed the short-term bullish bias from positive to negative.
The revelation of the RBNZ's interest rate decision will result in significant market volatility. Nonetheless, a clear break over Tuesday's high of 0.6146 would propel the asset toward the round-number resistance level of 0.6200. A break of the latter will cause the asset to approach its peak on June 4 of 0.6253.
Alternatively, dollar bulls might extend losses if the asset falls below its low of 0.6097 from June 11. This would lead to a sharp decrease in the value of the asset to a low of 0.6033 on 19 May 2020, followed by psychological support at 0.6000.
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