NZD/USD Price Analysis: Finds temporary support near 0.6070, Fed Powell’s testimony in focus

• NZD/USD finds an interim support near 0.6070, downside remains favored on dismal market mood.
• Fed Powell might maintain a hawkish rhetoric in his testimony before Congress on Wednesday.
• China’s ambitious growth target fails to uplift the New Zealand Dollar’s appeal.

The NZD/USD pair finds some buying interest after a sell-off to near 0.6070 in the European session on Tuesday. The Kiwi asset is expected to remain on the tenterhooks as investors await the Federal Reserve (Fed) Chair Jerome Powell’s testimony before Congress, scheduled for Wednesday and Thursday.

Fed Powell is expected to maintain a hawkish rhetoric amid absence of evidence that could signal a significant progress in inflation declining towards the 2% target.

The market sentiment remains cautious ahead of the Fed Powell’s testimony. S&P 500 futures have generated significant losses in the London session. The US Dollar Index (DXY) is slightly up 0.03% at 103.85.

Meanwhile, Chinese Premier Li Qiang’s ambitious 5% Gross Domestic Product (GDP) target for 2024 has failed to uplift demand for the New Zealand Dollar. The New Zealand economy is one of China's major trading partners, and improving Chinese economic prospects generally results in a positive development for the Kiwi Dollar.

NZD/USD declines toward the horizontal support of the Descending Triangle pattern on a four-hour timeframe, placed from January 23 low at 0.6062. The downward-sloping border of the aforementioned chart pattern is plotted from December 25 high at 0.6410.  

Usually, a Descending Triangle pattern exhibits indecisiveness among market participants but with a slight downside bias due to lower highs and flat lows.

The asset remains below the 50-period Exponential Moving Average (EMA) near 0.6118, indicating uncertainty for near-term demand.

The 14-period Relative Strength Index (RSI) falls into the bearish range of 20.00-40.00 range after failing to shift in the 40.00-60.00 region. This indicates a “sell on rise” behavior of market participants.

Going forward, a downside move below February 13 low near 0.6050would expose the asset to the psychological support of 0.6000, followed by November 9 high at 0.5956.

On the flip side, an upside move would emerge if the asset will break above the round-level resistance of 0.6200, which will drive the asset towards February 22 high at 0.6220, followed by January 11 high at 0.6260.

NZD/USD four-hour chart