NZD/USD Price Analysis: Sticks to modest gains around 0.6100, not out of the woods yet

• NZD/USD stages a modest recovery from over a one-week low amid some USD selling.
• The technical setup warrants some caution before positioning for any meaningful gains.
• Acceptance below the 100-day SMA is needed to confirm the near-term negative outlook.

The NZD/USD pair attracts some buying during the Asian session on Thursday and reverses a part of the previous day's heavy losses to a one-and-half-week low touched in the aftermath of the Reserve Bank of New Zealand (RBNZ) policy decision. Spot prices currently trade around the 0.6100 mark, albeit lack follow-through as traders keenly await the release of the US Personal Consumption Expenditures (PCE) Price Index before placing fresh directional bets.

Heading into the key data risk, the US Dollar (USD) bulls seem reluctant to place aggressive bets and opt to wait on the sidelines, which, in turn, is seen lending some support to the NZD/USD pair. That said, the Federal Reserve's (Fed) higher-for-longer rates narrative should help limit any meaningful USD downfall. Apart from this, a generally weaker tone around the equity markets could benefit the Greenback's relative safe-haven status and cap the risk-sensitive Kiwi.

From a technical perspective, the post-RBNZ slump showed some resilience below the 100-day Simple Moving Average (SMA) and stalled just ahead of the 200-day SMA. The latter is currently pegged near the 0.6080-0.6075 region and should act as a key pivotal point. Given that oscillators on the daily chart have just started gaining negative traction, a convincing break below the said support will be seen as a fresh trigger for bearish traders and pave the way for deeper losses.

The subsequent downfall has the potential to drag the NZD/USD pair back towards the YTD low, around the 0.6040-0.6035 region touched earlier this February, en route to the 0.6000 psychological mark. The next relevant support is pegged near the 0.5965 area before spot prices weaken further below the 0.5940-0.5935 intermediate support, towards testing sub-0.5900 levels for the first time since November 2023.

On the flip side, any further recovery is more likely to attract fresh sellers and remain capped near the 0.6140-0.6145 horizontal resistance. That said, a sustained strength beyond could trigger a short-covering rally and allow the NZD/USD pair to reclaim the 0.6200 round-figure mark. This is followed by the monthly peak, around the 0.6215-0.6220 region touched last week, which if cleared decisively will shift the near-term bias back in favour of bullish traders.

NZD/USD daily chart