NZD/USD Price Analysis: Finds support after a marginal correction, US Inflation in focus

• NZD/USD has sensed support near 0.6212 as the overall market mood is quite upbeat.
• A steady interest rate policy by the RBNZ seems healthy for NZ’s economic outlook.
• NZD/USD is gathering strength to deliver a breakout of the Inverted Head and Shoulder pattern.

The NZD/USD pair has resumed its upside journey after a marginal correction to near 0.6212 in the early London session. The Kiwi asset has remained in the upside trajectory after the Reserve Bank of New Zealand (RBNZ) kept interest rates unchanged at 5.5%.

NZ economy is already going through a technical recession, therefore, the interest rate decision of maintaining the status quo by RBNZ Governor Adrian Orr seems healthy for the economic outlook.

The US Dollar Index (DXY) is demonstrating a non-directional performance after sharply correcting to near 101.34 ahead of the Consumer Price Index (CPI) data for June. Investors are anticipating a decline in inflationary pressures amid declining gasoline prices.

NZD/USD is gathering strength to deliver a breakout of the Inverted Head and Shoulder chart pattern on a two-hour scale. A breakout of the neckline plotted from June 22 high around 0.6220 will result in a bullish reversal.

The Relative Strength Index (RSI) (14) is consistently oscillating in the 40.00-60.00, which indicates a sideways performance.

Going forward, a decisive break above the intraday high around 0.6240 will drive the asset towards May 17 high at 0.6274 followed by the round-level resistance at 0.6300.

Alternatively, a downside move below June 23 low at 0.6116 will expose the asset June 05 low at 0.6041. A slippage below the latter would expose the asset to psychological support at 0.6000.

NZD/USD two-hour chart