NZDUSD: Kiwi Bounces Off Strong Support

The New Zealand Dollar, also known as the Kiwi, bounced on Tuesday and was seen to be 0.60 per cent stronger during the London session, trading at around 0.6750.

Monday’s decline stopped near the first major support of 0.6715/20 and bulls managed to defend it, therefore the current uptrend momentum still seems valid. If this support fails to hold, further decline toward the 100-day moving average at 0.6650 could occur and the immediate uptrend could be cancelled. Another major bullish area could be located at 0.66 and if the price drops below, the trend may switch back to bearish.

On the upside, the Kiwi could be targeting the previous swing highs, which are slightly above the 0.68 handle and afterward the 200-day moving average, which is located near the 0.69 handle. From the more intraday perspective, the resistance could be located at 0.6750 as well.

The Kiwi still remains heavily oversold, according to the CFTC data, and therefore another rally could be fueled by investors exiting their short positions. Moreover, the RSI indicator is also supporting the bullish view for the near future. 

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