NZD/USD Price Analysis: Bulls need to break a key weekly level at this juncture

• The weekly correction into the 38.2% Fibonacci has a confluence with the May swing lows.
• A firm break through the resistance will be needed if the bulls are going to stay in control towards 0.6720.

The NZ dollar is attracting a bid as the US dollar nurses last week's losses and continues to bleed out on Monday. As measured by the DXY index vs. a basket of major currency rivals, the greenback is headed for its first monthly drop in five months. Investors have scaled back bets that rising US rates will send the greenback higher within the bull cycle as fears of a global recession have receded a little.

On the charts, this gives the kiwi bulls an opportunity to take on the prior daily resistance as follows:

However, the bulls need a clean break of the resistance or they will risk facing a firm move by the bears:

The prior resistance on the daily and 4-hour charts that have a confluence with the daily Fibonacci scale would be expected to act as a support structure for the coming sessions. 

From a weekly perspective, however, the bulls will be cautious around such a key weekly level as this:

The correction into the 38.2% Fibonacci that has a confluence with the May swing lows could offer a firm area of resistance and consequently push the bulls back. In doing so, this could embolden the bears and lead to a downside continuation for the forthcoming weeks.

On the other hand, a firm break through the resistance will leave the bulls in good stead for a deeper correction towards 0.6720 and the prior support structure that has a confluence with the 61.8% golden ratio.