Anna 
The NZD/USD pair has advanced to nearly 0.6130 during the London session on Friday, underpinned by growing expectations of the Reserve Bank of New Zealand (RBNZ) intensifying interest rates. This shift is attributed to sustained inflationary pressures and a stable demand for labor.
ANZ analysts anticipate the RBNZ’s Official Cash Rate (OCR) to witness a 25 basis points (bps) increase in both February and April, potentially reaching 6%. This outlook positions the New Zealand Dollar favorably against the US Dollar, particularly as the Federal Reserve (Fed) concludes its rate hikes and shifts its focus to monitoring inflation closely, with potential rate cuts on the horizon.
The US Dollar Index (DXY) retreats as Fed policymakers refrain from providing a detailed timeline for rate cuts in the current year. While the Fed speculates three rate cuts, the absence of a clear timeframe contributes to market uncertainty.
NZD/USD has experienced a notable recovery following a negative divergence on the four-hour chart. Despite forming a lower low at 0.6037, the momentum oscillator 14-period Relative Strength Index (RSI) displayed a higher low.
The asset has surpassed the 50-period Exponential Moving Average (EMA), signaling a bullish near-term outlook. With the RSI (14) rising above 60.0 and avoiding overbought signals, the potential for further upside is evident.
A sustained move above the horizontal resistance from the January 31 high at 0.6170 would propel the asset towards the psychological resistance level of 0.6200, followed by the January 10 high at 0.6255.
Alternatively, a breach below the February 5 low of 0.6037 might expose the asset to the psychological support at 0.6000, with further downside potential to the November 9 high at 0.5955.
