NZD/USD technical analysis: Eyeing biggest monthly gain since November 2018

• NZD/USD is up nearly 4% on a month-to-date basis. 
• The pair is looking most overbought in nearly two years, according to daily RSI. 
• Even so, the outlook remains bullish with no signs of buyer exhaustion on the daily price chart. 

NZD/USD appears on track to test print its biggest single-day percentage gain in over a year. 

The Kiwi is currently trading at 0.6674, representing nearly 4 percent gains on a month-to-date basis. The pair had rallied by more than 5% in November 2018 and 3.13% in January 2019. 

Notably, the bulls have dominated the fourth quarter amid the easing of US-China trade tensions and the risk-on rally in the equities. 

At press time, NZD/USD is flashing 6.58% gains on a quarter-to-date basis. 

Daily RSI at 2-year highs

The 14-day relative strength is hovering at 77.58, the highest level since January 2018. An above-70 reading indicates overbought conditions. 

The RSI, however, would gain credence if and when signs of bullish exhaustion emerge on the daily chart in the form of Doji, Bearish Engulfing/Outside Day, bearish pin bar, etc. 

At press time, the NZD/USD pair is flashing no such signs and is looking north with higher lows and higher highs setup. 

The path of least resistance remains to the higher side and the hurdle at 0.6706 (Jan. 22, 2019 low) could come into play before the year-end. 

A close below the 10-day average at 0.6618 would abort the bullish view. 

Daily chart

Trend: Bullish

Technical levels