CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

NZD/USD Rate Outlook: RSI Flirts with Overbought Territory

Article By: ,  Strategist

New Zealand Dollar Outlook: NZD/USD

NZD/USD takes out the June high (0.6222) as Federal Reserve Chairman Jerome Powell signals an imminent change in monetary policy, with the recent rally in the exchange rate pushing the Relative Strength Index (RSI) toward overbought territory.

NZD/USD Rate Outlook: RSI Flirts with Overbought Territory

NZD/USD extends the rally from the start of the week to register a fresh monthly high (0.6234), and the exchange rate may attempt to further retrace the decline from the January high (0.6330) even as the Reserve Bank of New Zealand (RBNZ) adjusts monetary policy ahead of its US counterpart.

Join David Song for the Weekly Fundamental Market Outlook webinar. David provides a market overview and takes questions in real-time. Register Here

A further advance in NZD/USD may push the RSI above 70 for the first time this year but the oscillator may show the bullish momentum abating if it struggles to push into overbought territory.

NZD/USD Price Chart – Daily

Chart Prepared by David Song, Strategist; NZD/USD on TradingView

  • Keep in mind, NZD/USD mounts a 4-week rally after dipping to a fresh yearly low (0.5850) earlier this month, with a break/close above the 0.6220 (50% Fibonacci extension) to 0.6270 (38.2% Fibonacci retracement) region bringing the January high (0.6330) on the radar.
  • Next area of interest comes in around the December high (0.6370) but NZD/USD may trade within a broad range amid the flattening slope in the 50-Day SMA (0.6052).
  • Failure to hold above 0.6170 (50% Fibonacci extension) may push NZD/USD back towards 0.6070 (61.8% Fibonacci extension), with the next region of interest coming in around the 0.5910 (61.8% Fibonacci extension) to 0.5960 (23.6% Fibonacci retracement).

Additional Market Outlooks

British Pound Forecast: GBP/USD Rally Eyes 2023 High

Gold Price Forecast: XAU/USD Pullback Keeps RSI Below 70

AUD/USD Rally Pushes RSI Towards Overbought Territory

US Dollar Forecast: USD/JPY Rebound Unravels Ahead of Fed Symposium

--- Written by David Song, Strategist

Follow on Twitter at @DavidJSong

The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

FOREX.com is a registered FCM and RFED with the CFTC and member of the National Futures Association (NFA # 0339826). Forex trading involves significant risk of loss and is not suitable for all investors. Full Disclosures and Risk Warning. Increased leverage increases risk.

GAIN Capital Group LLC (dba FOREX.com) 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA. GAIN Capital Group LLC is a wholly-owned subsidiary of StoneX Group Inc.

© FOREX.COM 2024