- Solid risk aversion theme is propelling the US Dollar for more upside.
- The kiwi asset has not challenged the 200-EMA around 0.6300 yet.
- A slippage inside the bearish range of 20.00-40.00 by the RSI (14) will trigger a bearish momentum.
The NZD/USD pair is struggling to climb above the immediate hurdle of 0.6320 in the early Tokyo session. The kiwi asset is facing immense pressure from the risk aversion theme. Meanwhile, investors are parking their funds in the US Dollar to dodge volatility in the global markets.
The US Dollar Index (DXY) is aiming to extend its gains above the immediate hurdle of 105.60. Meanwhile, the 10-year US Treasury yields have dropped to near 3.53% after a decent recovery.
On an hourly scale, the kiwi asset is displaying back-and-forth moves in a range of 0.6300-0.6350 after dropping from the critical hurdle above 0.6450. The major has yet not surrendered the 200-period Exponential Moving Average (EMA) marginally below 0.6300, which indicates that the long-term trend is still intact but with caution. Meanwhile, the 20-EMA at 0.6326 is acting as a major barricade for the asset.
The Relative Strength Index (RSI) (14) is hovering around 40.00. A slippage inside the bearish range of 20.00-40.00 will trigger a bearish momentum.
Going forward, a downside move below the round-level cushion of 0.6300 will explode volatility contraction and will drag the kiwi asset toward November 29 high around 0.6250, followed by November 29 low below 0.6200.
On the contrary, a breakout of the consolidation by overstepping Monday’s high at 0.6350 will drive the major towards the round-level resistance at 0.6400. A breach of the latter will expose the major to retest the previous week’s high at 0.6477.