- NZD/USD is trading higher on expectations that the Fed has ended its rate hike cycle.
- Technical indicators suggest bullish sentiment to explore psychological resistance around 0.6100.
- The 23.6% Fibonacci retracement at 0.6004 could act as support in line with the nine-day EMA.
NZD/USD is extending gains around three-month highs, trading around 0.6050 during Tuesday’s early European session. Sales pressure on American dollar (USD) continues as there is a growing consensus that the Federal Reserve (Fed) has ended its policy tightening campaign. Market sentiment is now leaning towards the likelihood of a rate cut by the company Fed starting March 2024.
The 14-day Relative Strength Index (RSI) is above the 50 level, indicating bullish sentiment for NZD/USD pair. This could encourage bullish moves towards the psychological resistance level around 0.6100.
In addition, the MACD (Moving Average Convergence Divergence) line, which is above the center line and diverges above the signal line, indicates an upward momentum of the market.
On the other hand, 23.6% Fibonacci a retracement to 0.6004 may serve as a key support level, followed by the nine-day EMA at 0.5988. A decisive break below the EMA could potentially pave the way for the pair to test the 38.2% Fibonacci retracement at 0.5960, corresponding to the significant level at 0.5950.