NZD/USD recoups weekly losses: Will it turn bullish again?

• NZD/USD holds below 20-SMA after Tuesday's quick bounce.

• Bullish signals strengthen, but a break above 0.6020 is still needed.

NZD/USD dropped to Monday’s low of 0.5845 before bouncing back to retest its 20-day simple moving average (SMA) at 0.5945, as the euphoria about the US-China trade deal faded, weighing on the US dollar. With the price still hovering around this line and near the 50% Fibonacci retracement level of the September–April downleg, the key question now is whether the bulls have enough momentum to break through that resistance and push into the 0.6000 area.

The positive rotation in the RSI and the stochastic oscillator, coupled with the bullish engulfing candlestick pattern formed on Tuesday, may help sustain buying interest. However, some caution is warranted, as the RSI remains on a downward slope, and the MACD continues to ease below its red signal line.

A continuation above the 61.8% Fibonacci level at 0.6020-0.6035 could place the pair back on a bullish track in the short-term picture, with resistance likely emerging near the 0.6100 level or even higher in the 0.6180–0.6220 region. Further gains beyond that could pave the way toward the October 2024 high of 0.6377.

In a bearish scenario, where the pair falls below the 38.2% Fibonacci level at 0.5825, the sell-off could accelerate toward the 0.5670–0.5695 region. A failure to stabilize there could drag the price further down to 0.5540–0.5580 and potentially toward the pandemic low of 0.5468.

Overall, NZD/USD may remain supported in the short term, though a sustained move above 0.6020 is needed to confirm a return to a bullish trajectory.