NZD/USD Technical Analysis: bull run put on hold by 4H RSI divergence

The NZD/USD pair is currently trading at 0.69, having hit two-month highs above 0.6940 last week. The pullback could be extended further to the ascending (bullish) 200-hour moving average (MA), currently at 0.6878.

Hourly Chart

The bearish divergence (lower highs in response to higher highs on price) of the relative strength index (RSI) seen in the above chart indicates that the rally from the Jan. 22 low near 0.67 has likely made a temporary top at 0.6742 and a pullback 0.6878 (200-hour MA) and 0.6872 (resistance of Jan. 27 high) could be in the offing.

The 5- and 10-day moving averages (MAs), however, are still trending north in favor of the bulls. The pullback to 0.6878-0.6872, therefore, could be short-lived.

A daily close below the 10-day MA, currently at 0.6840, would invalidate the bullish setup, signaled by the triangle breakout, confirmed on Jan. 25.

Trend: pullback likely