The New Zealand Dollar (NZD) trades lower against the US Dollar (USD) on Tuesday, weighed by a moderate risk-averse sentiment as tensions in the Middle East grow.
The NZD/USD pair has reversed Monday’s gains and pulled back to the 0.5880 area ahead of the US session opening, after rejection at 0.5926
Risk appetite waned on Tuesday as the US-Iran Memorandum of Understanding expired without advances in the peace process. Washington and Tehran have ramped up their threats, and the key Strait of Hormuz remains effectively closed, buoying Oil prices and adding pressure on the risk-sensitive Kiwi. Technical Analysis: Key support is at 0.5830 NZD/USD trades at 0.5879, holding a mildly bullish bias while above the 200-day simple moving average (SMA) at 0.5834, yet with momentum indicators hinting at waning upside pressure.
The daily Relative Strength Index (RSI) has retreated below 60 and trends towards the 50 midline, and the Moving Average Convergence Divergence (MACD) has ticked below the zero line, suggesting that bulls are losing conviction. Immediate support is seen at the ascending trendline from late June lows, now around 0.5860, although the key support level is the 200-day SMA at 0.5834. A break below that level would confirm a deeper correction, aiming for the late July lows just above 0.5760.