NZD/USD Price Analysis: Bulls sustain above 200-EMA after a Wyckoff’s spring formation

• A Spring formation above 0.5500 triggered a short-term reversal in the asset.
• The kiwi bulls are solid above the 200-EMA despite a rebound in the risk-off impulse.
• An upside break of the downward-sloping trendline will expose the asset to hit 0.6000.

The NZD/USD pair has sensed barricades while attempting to cross the round-level resistance of 0.5700 and has dropped to near 0.5662 in the Tokyo session. A rebound in the risk-off impulse has weighed pressure on the kiwi bulls. Meanwhile, the US dollar index (DXY) has accelerated to near 113.00. It is worth noting that the responsiveness of the decline in the asset is extremely lower than the DXY’s recovery.

On an hourly scale, the asset rebounded firmly after Richard Wyckoff’s Spring formation, which indicates the climax of the selling pressure and investors make a fresh demand, considering the asset a value buy. The Spring has formed above the psychological support of 0.5500. Apart from that, the downward-sloping trendline from October 6 high at 0.5815 is acting as a major barricade for the counter.

The 200-period Exponential Moving Average (EMA) at 0.5650 is acting as a major cushion for the counter.

Meanwhile, the Relative Strength Index (RSI) (14) has surrendered the bullish range of 60.00-80.00, which indicates a loss in the upside momentum.

Should the asset oversteps the downward-sloping trendline plotted from October 6 high at 0.5815 decisively, kiwi bulls 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 hourly chart