Technical Analysis – NZDUSD positive impetus fades as 100-MA deters gains

NZDUSD has dipped back down to the 200-period simple moving average (SMA) after the pair’s recent bounce around the 0.6986 level was capped by the 100-period SMA. The horizontal 100- and 200-period SMAs are promoting an overall trendless bias, while the diving 50-period SMA, is suggesting a downward tendency in the pair.

At the moment the short-term oscillators are skewed more to the downside and are reflecting the pickup in bearish momentum. The MACD is holding marginally above its red trigger and zero lines, while the RSI is falling in negative territory. Furthermore, endorsing additional downward forces is the negative charge in the stochastic oscillator.

If the price manages to close below the support zone between the 0.7030 level, that being the 38.2% Fibonacci retracement of the up leg from 0.6804 until 0.7169, and the 200-period SMA at 0.7022, the bears may extend the drop to test the support section from the 0.7000 hurdle until the 50.0% Fibo of 0.6986. Additional deterioration in the pair beneath this defence, and simultaneously past the 0.6980 trough and lower Bollinger band could reinforce the decline to challenge the 0.6932-0.6943 obstacle. Should selling interest overpower, the bears may then target the 0.6903 barrier.

Alternatively, if buyers re-emerge and drive the price back above the 200-period SMA and the mid-Bollinger band around 0.7030, successive upside restraints could emanate from the 50-period SMA at 0.7055. From here buyers would need to muster the power to pilot the price over the tough resistance section from the 23.6% Fibo of 0.7083 until the 0.7100 mark. Successfully reviving upside momentum, the pair may then float the price towards the 0.7138 high before challenging the resistance boundary of 0.7152-0.7169, the latter being a two-and-a-half-month peak.

In conclusion, negative forces have yet to fully negate the soundness of the short-term positive structure. That said, to cement the bearish outlook in NZDUSD, the price would need to close below the 200-period SMA and the 0.6980 trough.

Latest News

US Open Note – Bank of Canada takes center stage; dollar loses momentum

Technical Analysis – Boeing’s stock nears key support ahead of Q3 earnings

Daily Market Comment – Bank of Canada showtime, US spending deal in sight

Technical Analysis – NZDUSD gains at risk as sellers push back

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.