NZD/USD: Break above 0.6380/0.6400 essential for confirming a larger uptrend – SocGen

NZD/USD trades slightly below the 0.6200 level. Economists at Société Générale analyze the pair’s technical outlook. 

Defence of 0.6050 crucial to avert deeper drop

NZD/USD rebound recently petered out at the trend line drawn since 2021 near 0.6380/0.6400 which is also a graphical hurdle representing highs of last July. A gradual pullback has taken shape after this test but interestingly, the pair is defending the upper part of previous small base and 200-DMA near 0.6050. This remains a crucial support.  

A short-term bounce towards the trend line at 0.6300 can’t be ruled out. Break above graphical hurdle of 0.6380/0.6400 would be essential for confirming a larger uptrend.  

There would be risk of a deeper downtrend in case the pair fails to hold above 0.6050.