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NZD/USD holds near 0.5870 as traders weigh US-Iran uncertainty
NZD/USD has stalled after a pullback from a two-month high just above 0.5900, with the pair hovering around the 200-period SMA area that analysts cite as a key support level.
NZD/USD hovered around 0.5870 in early European trading on Tuesday, with the pair largely steady after a retracement from a two-month high. FXStreet said the move reflects uncertainty tied to US-Iran peace talk headlines, with Iran denying that negotiations with the US are underway and a subsequent political backlash dampening expectations for a diplomatic resolution.
The dollar got additional support as recovering crude prices revived inflation concerns, which in turn fed expectations for Federal Reserve rate hikes. That backdrop helped limit upside for NZD/USD, while a more hawkish stance from the Reserve Bank of New Zealand offered some cushion for the New Zealand dollar.
On the technical side, FXStreet pointed to a bounce off the 200-period Simple Moving Average on the four-hour chart and a breakout through the 0.5865 supply zone as triggers that helped sustain a near-term bullish bias. The outlet added that a drop back below 0.5865 is more likely to run into support near the 200-period SMA at 0.5757, while a break above the recent swing high near 0.5909 would set the stage for further gains.
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