NZD/USD Price Analysis: Time for a bumpy ride ahead below 0.6100 ahead of US GDP

• NZD/USD has shown a less-confident recovery after a fresh six-week low of 0.6112, however, the downside seems favored.
• Soaring risk of investment in the S&P500 improved the appeal for the US Dollar Index as safe-haven.
• NZD/USD is making a Head and Shoulder chart pattern and a breakdown of the same results in a bearish reversal.

The NZD/USD pair has shown a mild recovery after printing a fresh six-week low of 0.6112 in the early Tokyo session. The Kiwi asset witnessed a steep fall on Wednesday after a V-shape recovery from the US Dollar Index (DXY) and a sell-off in the New Zealand Dollar over a headline that the Reserve Bank of New Zealand (RBNZ) has considered the qualitative easing proposal citing that current restrictions may be unnecessarily reducing efficiency as risks to financial stability are lower.

The USD Index recovered sharply after dropping to near 101.00 as the soaring risk of investment in the S&P500 improved the appeal for the former as a safe-haven.

Going forward, the United States annualized Gross Domestic Product (GDP) (Q1) data will remain in the spotlight. The street is anticipating a decline in the growth rate to 2.0% from the former pace of 2.6%.

NZD/USD is making a Head and Shoulder chart pattern on a daily scale, which signals a long consolidation, and a breakdown of the same results in a bearish reversal. Broadly, the New Zealand Dollar will remain safe if it manages to sustain above the horizontal resistance plotted from March 08 low at 0.6084.

Declining 10-and 20-period Exponential Moving Averages (EMAs) at 0.6162 and 0.6190 respectively indicate more weakness ahead.

Meanwhile, the Relative Strength Index (RSI) (14) is on the edge of the bearish range of 20.00-40.00. A slippage inside the same will activate the downside momentum.

Going ahead, a breakdown of April 26 low at 0.6110 will drag the asset toward March 08 low at 0.6088 followed by the 15 Nov 2022 low at 0.6058.

Alternatively, an upside move above April 24 high at 0.6168 will drive the Kiwi asset toward the round-level resistance at 0.6200. A breach of the latter will allow the Kiwi to report a fresh weekly high above April 19 high at 0.6227.

NZD/USD daily chart