NZD/USD Price Analysis: Negative Divergence in action, 0.5800 a key hurdle

• A mixed market mood is responsible for a rangebound action in NZD/USD.
• The 50-EMA at 0.5640 still has not been poked by the kiwi bulls.
• A negative divergence will trigger if the asset oversteps 0.5814.

The NZD/USD pair is displaying back-and-forth moves above the immediate cushion of 0.5600 in the early Tokyo session after a minor correction from 0.5632. The asset is witnessing a volatility contraction ahead of the US inflation data as investors are awaiting fit and proper guidance before making further positions. Meanwhile, the risk profile is mixed as S&P500 surrendered its intraday gains while settling Wednesday’s trading session.

On a four-hour scale, the asset has witnessed a rebound after witnessing exhaustion in the downtrend. It is worth noting that the asset was continuously making lower lows while the momentum oscillator, Relative Strength Index (RSI) (14) made a higher low. This indicates signs of a loss in the downside momentum.

The major is attempting to sustain above the 20-period Exponential Moving Average (EMA) at 0.5608. While the 50-EMA at 0.5640 has not been poked yet.

The formation of a negative divergence will trigger if the asset oversteps the horizontal resistance plotted from the previous week’s high at 0.5814, which will drive the asset towards September 29 high at 0.5911, followed by the psychological resistance at 0.6000.

Alternatively, the greenback bulls will regain strength if the asset surrenders the two-year low at 0.5536, which will drag the asset toward March 2020 low at 0.5469. A slippage below the latter will expose the asset to the round-level cushion at 0.5400.

NZD/USD four-hour chart