Technical analysis – NZDUSD extends pullback after advance got rejected

NZDUSD had been on a steady decline in 2022, finding its feet at the 31-month low of 0.5510 in early October. Even though the pair has staged a solid rebound since then, it is currently experiencing a downside correction after its uptrend got rejected at the seven-month high of 0.6528.

The momentum indicators currently suggest that selling forces are strengthening. Specifically, the MACD histogram is softening below its red signal line but remains in the positive region, while the stochastic oscillator is descending near its 20-oversold zone.

Should bearish pressures persist, the pair could decline towards the 0.6364 support, which overlaps with the 50-day simple moving average (SMA). Sliding beneath that floor, the 0.6305 barrier could curb further declines before the 2023 low of 0.6190 gets tested. Even lower, the pair may challenge the November support of 0.6063.

Alternatively, should buyers re-emerge and push the price higher, immediate resistance could be met at the recent rejection point of 0.6528, which is also a seven-month high. Conquering this barricade, the bulls could then aim for the June peak of 0.6575 before 0.6812 comes under examination. A break above the latter could set the stage for the 2022 high of 0.7032.

Overall, NZDUSD seems to be experiencing a downside correction as its rebound failed twice to cross above the 0.6528 ceiling, but the pair retains its bullish medium-term pattern. A test of the 50-day SMA could prove to be the next decisive factor for the pair’s future trajectory.

Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.

All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.

Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.

We are using cookies to give you the best experience on our website. Read more or change your cookie settings.

Risk Warning: Your capital is at risk. Leveraged products may not be suitable for everyone. Please consider our Risk Disclosure.