Anna 
In the European session on Wednesday, the NZD/USD pair found interim support near 0.5990, reflecting vulnerability in the Kiwi asset amidst New Zealand’s technical recession. The economy contracted in the last two quarters of 2023, presenting a challenge for the Reserve Bank of New Zealand (RBNZ) as it balances high inflation with a poor economic outlook. Despite maintaining the Official Cash Rate (OCR) at 5.5% to combat stubborn inflation, low liquidity flow in the economy is dampening investment plans and consumer spending.
Global markets are also witnessing asset-specific action as risk-perceived currencies face uncertainty ahead of the release of the United States core Personal Consumption Expenditure price index (PCE) data for February. S&P 500 futures have shown significant gains in the London session, contributing to market volatility.
The US Dollar Index (DXY) has risen to 104.40, nearing its monthly high of 104.50, while 10-year US Treasury yields remain unchanged at 4.23%.
NZD/USD experienced a sharp downside move after breaking down from the Double Top chart formation near 0.6069 on a four-hour timeframe. Testing territory below the psychological support of 0.6000, the asset is expected to continue facing downward pressure, with the 50-period Exponential Moving Average (EMA) near 0.6040 acting as a significant barrier for New Zealand Dollar bulls.
The 14-period Relative Strength Index (RSI) oscillates in the bearish range of 20.00-60.000, prompting investors to consider building fresh shorts upon RSI pullbacks to 60.00.
In the event of a break below the intraday low of 0.5987, further downside is anticipated, potentially dragging the asset toward the November 17 low at 0.5940, followed by the round-level support of 0.5900.
Alternatively, a recovery move above the March 6 low at 0.6069 could drive the pair toward the March 18 high at 0.6100, with a breach of the latter potentially leading to a further ascent toward the March 12 low at 0.6135.
