It is moving above 0.6200, aiming for a seven-month high

• NZD/USD could test the seven-month high of 0.6247 due to the prevailing uptrend.
• The nine-day EMA is positioned above the 50-day EMA, signaling short-term bullish momentum to prevail.
• If the 14-day RSI breaks above the 70 level, it could signal that the pair is overbought and a potential short-term correction.

NZD/USD is recovering recent losses from the previous session, trading around 0.6220 during European hours on Tuesday. On the daily chart, the pair is moving higher in the upper limit of an ascending channel, supporting a bullish outlook.

The 14-day Relative Strength Index (RSI) is currently just below the 70 level, confirming bullish sentiment. However, if the RSI moves higher, it could signal that the currency pair is becoming overbought, suggesting a potential near-term correction.

Furthermore, the nine-day exponential moving average (EMA) is positioned above the 50-day EMA, signaling that the NZD/USD pair is experiencing near-term upward momentum and is likely to continue to rise.

On the other hand, NZD/USD may face immediate resistance around the upper boundary of the ascending channel at 0.6230, followed by the seven-month high of 0.6247 recorded on 21 August.

In terms of support, the nine-day EMA at 0.6149 serves as an immediate support level. A break below this could weaken the uptrend, potentially leading the pair to test the lower boundary of the ascending channel at 0.6070, followed by the 50-day EMA at 0.6064.

If the pair breaches the latter, bearish sentiment may emerge, putting pressure on NZD/USD to head towards the “backward support” region around the 0.5850 level.

NZD/USD: Daily chart