- NZD/USD is displaying back-and-forth action ahead of US GDP data.
- The USD Index is aiming to build a cushion around 101.20 despite the risk-on market mood.
- The Ascending Triangle formation is indicating a squeeze in volatility.
The NZD/USD pair is continuously facing hurdles in recapturing the psychological resistance of 0.6500 in the early European session. The Kiwi asset is expected to remain on the tenterhooks as investors are awaiting the release of the United States Gross Domestic Product (GDP) data.
The US Dollar Index (DXY) is aiming to build a cushion around 101.20 as anxiety among investors is escalating regarding the US GDP, core Personal Consumption Expenditure (PCE), and Durable Goods Orders data. Meanwhile, positive market sentiment is solidifying further as the S&P500 futures have extended their morning gains.
NZD/USD is displaying topsy-turvy action in an Ascending Triangle chart pattern that indicates volatility contraction on an hourly chart. The New Zealand Dollar has sensed demand after dropping to near the upward-sloping trendline plotted from January 19 low at 0.6365 while the horizontal resistance is placed from January 18 high at 0.6531.
The 20-EMA at 0.6483 is overlapping the Kiwi asset, which indicates consolidation ahead.
Also, the Relative Strength Index (RSI) (14) is oscillating in a 40.00-60.00 range, which indicates an absence of a potential trigger for a decisive move.
For an upside move, the asset needs to surpass Wednesday’s high at 0.6530, which will drive the asset toward June 3 high at 0.6576. A breach of the latter will expose the asset to the round-level resistance at 0.6600.
On the flip side, a breakdown below January 16 high at 0.6426 will drag the Kiwi asset toward January 17 low at 0.6366 followed by January 12 low around 0.6300.
NZD/USD hourly chart