Technical Analysis – NZDUSD rebound loses steam, downside risks heighten

NZDUSD improvements from the 0.6215 low are dwindling within the 0.6342-0.6410 region (previous support-now-resistance), which stretches back to mid-June 2020, following a five-week descent from the 0.7033 April high. Furthermore, the diving simple moving averages (SMAs) are sponsoring a revival of the bearish trend in the pair past the near two-year low of 0.6215.

The Ichimoku lines are indicating a pause in negative pressures, while the short-term oscillators are reflecting the latest waning in downward momentum. In their respective bearish zones, the RSI is creeping higher and the MACD has overstepped its red trigger line. Moreover, the positively charged stochastic oscillator is promoting additional upside price action in the pair.

If positive impetus continues to diminish and the price recoils below the 0.6342-0.6410 barrier, initial support could stem from the near two-year low of 0.6215. If selling interest amplifies, the rekindling of the downtrend may then meet the 0.6167 and the 0.6080 respective lows from the latter half of May 2020. Snowballing further, the price may target the 0.5920 May trough, in line with the lows over the mid-April until mid-May 2020 period.

Otherwise, if fresh positive traction unfolds and drives the price north of the 0.6342-0.6410 boundary, buyers may be encouraged to pilot for the 0.6568-0.6629 resistance zone, shaped by the May high and the February inside swing lows. From here, to reinstate confidence in the pair, the price would need to creep beyond the 0.6665-0.6718 resistance barricade, reinforced by the Ichimoku cloud and the falling 50- and 100-day SMAs. Recapturing the area north of the cloud may encourage buyers to challenge the 0.6813 high and the adjacent 200-day SMA of 0.6834.

Summarizing, NZDUSD is exhibiting a bearish bias beneath the 0.6568 high and the SMAs. Additionally, positive prospects in the pair may dwindle further should the price fail to lift above the 0.6342-0.6410 border.



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.