Technical Analysis – NZDUSD steers to 13-month low levels but still neutral
- Anthony Charalambous
NZDUSD has detached from the converged simple moving averages (SMAs) and has dipped below the multiple lower wicks of the candles from January 6 till the 11. The stabilized SMAs are endorsing a more neutral trajectory in the price as the pair remains rangebound, oscillating between the 0.6678-0.6700 floor and a 0.6890-0.6910 ceiling.
The falling Ichimoku lines are indicating that negative forces are commanding lately, while the short-term oscillators are suggesting that the price may test the floor of the one-month sideways market. The MACD, in the bearish region, is diving further below its red trigger line, while the RSI is nearing the 30 oversold barrier. The stochastic oscillator is sustaining its negative charge, but the %K line is hinting of possible stalling in downside momentum.
Heading lower, preliminary support could arise at the critical 0.6678-0.6700 section. In the event selling interest intensifies and the price breaks beneath the floor of the range, sellers may then target the key 0.6612 and 0.6588 neighbouring troughs from the start of November 2020. Should the negative trajectory endure, the next downside barrier to overcome lies around 0.6551.
If buyers re-emerge and drive the price back over the immediate 0.6732 and 0.6752 obstacles (previous support-now-resistance), the Ichimoku lines could delay an overshoot in the price. That said, for upside momentum to strengthen, the bulls would need to surpass a resistance section located between the 200-period SMA at 0.6787 and the Ichimoku cloud’s lower band at 0.6810. Piloting higher, the price may test the 0.6849 and 0.6873 boundaries respectively before buyers can challenge the 0.6890-0.6910 ceiling to the horizontal price zone.Summarizing, NZDUSD is exhibiting an increase in downward forces and has neared the lower end of the trading range. Yet, for the neutral-to-bearish tone to turn bearish, the price would need to break below the 0.6678-0.6700 floor. On the other hand, the picture could become optimistic with a climb in the price north of the 0.6890-0.6910 barricade.
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.