The uptrend stops, the pair pulls back from multi-month highs

• The NZD/USD pair fell more than 1% on Wednesday from January highs.
• The RSI and MACD indicators both indicate a decline in buying momentum.
• Despite the retreat, the pair remains strongly optimistic.

On Wednesday, the NZD/USD pair faced selling pressure, falling 1.20% to settle at 0.6260. That reversal halted a five-day winning streak and marked a pullback from multi-month highs hit on Tuesday.

Technical indicators suggest that the buying pressure behind NZD/USD is waning. The Relative Strength Index (RSI) rose close to the overbought threshold, but is currently in a sharp decline, indicating that buying pressure is easing. Similarly, the Moving Average Convergence Divergence (MACD) histogram remains green, but is also down, aligning with the RSI’s bearish signals.

NZD/USD Daily Chart

Despite the pullback, the NZD/USD pair maintains a strongly bullish outlook. The pair is trading above its key moving averages and still close to its annual highs. Additionally, resistance levels to watch include 0.6300, 0.6350 and 0.6400. If the pair fails to bounce back above 0.6300, it could experience a deeper correction, possibly towards 0.6200.