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NZD/USD PRICE FORECAST: BULLS NEED TO WAIT FOR STRENGTH BEYOND 0.6200 BEFORE PLACING FRESH BETS

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  • NZD/USD regains positive traction on Monday amid broad-based USD weakness. 
  • A sustained move beyond the 0.6200 mark should pave the way for further gains.
  • Traders, however, might wait on the sidelines ahead of the Fed on Wednesday. 

The NZD/USD pair attracts some dip-buying on the first day of a new week and reverses a major part of Friday's pullback from the 0.6200 neighborhood, or a one-week high renewed US Dollar (USD) selling bias. Spot prices climb to the 0.6180-0.6185 region during the first half of the European session and seem poised to build on last week's bounce from the very important 200-day Simple Moving Average (SMA). 

Rising bets for an oversized 50-basis points interest rate cut by the Federal Reserve (Fed) drag the USD Index (DXY) back closer to the YTD low and lend support to the NZD/USD pair. Apart from this, a generally positive tone around the equity markets is seen undermining the safe-haven buck, which helps offset a string of dismal Chinese macro data released over the weekend and benefits the risk-sensitive Kiwi. 

From a technical perspective, oscillators on the daily chart – though have been recovering from lower levels – are yet to confirm a positive bias. This makes it prudent to wait for some follow-through buying beyond the 0.6200 mark before placing bullish fresh and ahead of the FOMC decision on Wednesday. The NZD/USD pair might then climb to the 0.6255 area en route to the 0.6300 mark or a multi-month high touched in August. 


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