NZD/USD Price Analysis: A test of 0.6300 looks real on a bullish flag breakout

• A breakout of a bullish flag has brought a sheer upside to the asset.
• The antipodean is aiming to drive the asset above 61.8% Fibo retracement.
• Advancing 20-and 50- EMAs signal more gains ahead.

The NZD/USD pair has surged strongly after a mild correction towards 0.6217. The asset has surpassed the critical hurdle of 0.6250 strongly. An upside break of the time correction has strengthened the kiwi bulls and has exposed the asset for more upside.

A breakout of the Bullish Flag chart pattern on an hourly scale has unleashed the kiwi bulls. Usually, an inventory distribution phase in the above-mentioned chart pattern denotes the initiation of longs by those market participants, which prefer to enter an auction after the establishment of a bullish bias.

The kiwi bulls have driven the asset to near 61.8% Fibonacci retracement (which is placed from June 16 high at 0.6396 to July 14 low at 0.6061) at 0.6268.

Advancing 20- and 50-period Exponential Moving Averages (EMAs) at 0.6229 and 0.6201 respectively add to the upside filters.

Also, the Relative Strength Index (RSI) (14) is oscillating in the 60.00-80.00 range, which signals a continuation of a bullish momentum ahead.

A corrective move towards Tuesday’s high at 0.6239 will be a bargain buy for the market participants. This will drive the asset towards 61.8% Fibo retracement at 0.6268, followed by the round-level resistance at 0.6300.

Alternatively, the greenback bulls could gain control if the asset drops below 38.2% Fibo retracement at 0.6190.  An occurrence of the same will drag the asset towards 23.6% Fibo retracement at 0.6139. A breach of the 23.6% Fibo retracement will expose the greenback bulls to recapture its two-year low at 0.6061.

NZD/USD hourly chart