NZD/USD Price Analysis: Recovers from 11-month low above 0.5800

• NZD/USD aims for stabilization above 0.5800 as the market sentiment improves.
• The 10-year US Treasury yields rebounded to 4.87% ahead of core PCE inflation data.
• NZD/USD delivers a V-shape recovery after a selling climax near 0.5772.

The NZD/USD pair discovered buying interest near an 11-month low at 0.5770 and climbed above the round-level resistance of 0.5800. The Kiwi asset gains strength as the market sentiment improves on expectations that the Federal Reserve (Fed) is done with hiking interest rates.

S&P500 futures generated significant gains in the European session, portraying a risk-on market mood. The US Dollar Index (DXY) corrects gradually from 106.90 ahead of the core Personal Consumption Expenditure (PCE) inflation data for September. The 10-year US Treasury yields rebound to 4.87%.

Going forward, the New Zealand Dollar will dance to the tunes of Q3 labor market data, which will be published next week. The employment data would set the undertone for the last monetary policy meeting by the Reserve Bank of New Zealand (RBNZ). The RBNZ may keep the Official Cash Rate (OCR) unchanged at 5.50%.

NZD/USD delivers a V-shape recovery after observing a selling climax near October 26 low at 0.5772. The Kiwi asset climbed above the horizontal resistance plotted from October 23 low around 0.5800, which has turned into support for the Kiwi bulls. The major aims for stabilization above the 50-period Exponential Moving Average (EMA), which trades around 0.5820.

The Relative Strength Index (RSI) (14) shifts into the 40.00-60.00 range from the bearish range of 20.00-40.000, which indicates that the bearish bias is fading away.

A decisive break above October 24 high at 0.5874 would drive the asset toward October 18 high at 0.5921 and September 25 high at 0.5975.

On the flip side, a downside move below 11-month low at 0.5740 would expose the asset to the round-level support at 0.5700. A breakdown below the latter would drag the asset toward a new annual low around 0.5670.

NZD/USD hourly chart