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.