Overbought conditions on daily chart point to a minor pullback

NZD/USD correct from multi-year tops of 0.7172.
Overbought RSI conditions on 1D could fuel a pullback.
Focus on US stimulus news and US dollar flows.

NZD/USD extends its corrective declines from two-and-a-half year highs of 0.7172, now holding the lower ground below 0.7150, as the US dollar stages an impressive bounce amid tepid market sentiment.

Markets still remain hopeful about a likely US stimulus deal, as they look to take profits off the table, as the final full week of this year draws to an end.

From a near-term technical perspective, the 14-day Relative Strength Index (RSI) hovers within the overbought territory suggesting that the price could pullback further before resuming the uptrend.

The immediate support for the bulls is seen at the 0.7100 round figure. The bullish momentum will hold so long as the price defends the upward-sloping 21-daily moving average (DMA) at 0.7045.

To the upside, the bulls need to takeout the 2020 tops of 0.7172 in order to challenge the 0.7200 barrier.