The NZD/USD pair continues to climb higher for the fifth day in a row on Monday, reaching a one-month high around the 0.6350 level heading into the North American session.
This positive move marks the seventh day in the previous eight and is due to the weakened US dollar, which is hovering near the monthly low reached last week.
This is caused by the expectation that the Federal Reserve is nearing the end of its rate-hiking cycle, as well as concerns over the US debt ceiling and the current risk-on market sentiment.
From a technical standpoint, the momentum has allowed the NZD/USD pair to break through a short-term descending trend-line hurdle and supports the possibility of additional gains. The oscillators on the daily chart are in the bullish territory and not yet overbought, which further supports this potential.
As a result, there is a distinct possibility that the NZD/USD pair may retest the April monthly swing low around the 0.6380 region and potentially reach the 0.6400 mark. Any further buying could drive the pair towards the next hurdle at the 0.6435-0.6440 region and potentially even the psychological mark of 0.6500.
On the other hand, the immediate downside is protected by the descending trend-line resistance breakpoint, which is currently near the 0.6300 level.
Any further decline is expected to attract fresh buyers and remain limited near the 200-day Simple Moving Average, around the 0.6255 zone, which should serve as a strong base for the NZD/USD pair.
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