NZDUSD has been climbing within an ascending trend channel, with higher lows connected by a rising trend line that’s been holding since late June.
The pair recently broke above the channel’s upper boundary near 0.5900 before pulling back slightly, currently trading around 0.5868. The Fibonacci retracement tool highlights where buyers could step back in should a deeper pullback unfold.
The 38.2% Fib sits at 0.5853, close to the channel’s return line, while the 50% level is at 0.5834. A larger correction could reach the 61.8% Fib at 0.5815 or the rising trend line itself, which might be the line in the sand for a bullish continuation.
If any of these levels hold as a floor, NZDUSD could resume its climb toward the 0.5913 swing high or higher. A break below the trend line and the Fibs, on the other hand, could open the door for a slide back toward the 100% Fib at 0.5755 or lower.
The 100 SMA is above the 200 SMA to confirm that the path of least resistance remains to the upside, or that the climb is more likely to gain traction than to reverse. The gap between the indicators is widening, reflecting strengthening bullish momentum, and both moving averages could offer additional dynamic support on dips.
Stochastic recently pulled back from the overbought region, reflecting a mild return in selling pressure after the latest rally. The oscillator has room to slide before reaching the oversold area, so the pullback could still have some room to run before buyers step back in.
RSI, meanwhile, is also retreating from overbought territory but remains above the midline, suggesting that bullish momentum hasn’t fully faded. If the oscillator finds support here, buyers could regain control and push price back toward the channel highs, keeping the broader uptrend intact for now.
NZDUSD could take cues from US jobs-related data as markets price in expectations for Friday’s NFP print.
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