Technical Analysis – NZDUSD consolidates around the 0.6800 mark, bearish tone remains
- Anthony Charalambous
NZDUSD is edging sideways across the 0.6800 mark as clear directional impetus has softened after the pair stretched to a near 13-month low of 0.6771. The diving 50- and 100-period simple moving averages (SMAs) are backing the bearish trajectory of the pair.
The squeeze in the Bollinger bands is hinting of an upcoming surge in volatility, while the short-term oscillators are somewhat suggesting sellers may regain the upper hand. The MACD has marginally returned beneath its red trigger line in the negative region, while the RSI is sliding in the bearish zone. Furthermore, the fresh dip in the stochastic %K line, just overhead of the 20 level, is suggesting negative forces may be strengthening.
To the downside, an immediate buffer zone that encompasses the lower Bollinger band, from the 0.6800 handle until the near 13-month low of 0.6771 could hinder the price from tumbling further. Additional defences could stem from the adjacent 0.6742-0.6759 support border, which could add credence to a forming barricade, preventing the descent from gaining pace. However, if sellers drive the pair underneath these obstacles, the price may then aim for the 0.6708 and 0.6678 barriers from the early part of November 2020 before testing the key 0.6612 trough.
On the other hand, pushing off the 0.6800 hurdle and over the mid-Bollinger band at 0.6824, buyers could encounter a reinforced resistance band existing between the upper Bollinger band at 0.6853 and the 0.6867 high. Overshooting this barrier, the price may then jump for the 0.6893 high and the 0.6917 border. Should buying interest endure, the price may then seek out the 100-period SMA at 0.6944 ahead of the resistance section of 0.6956-0.6986.Summarizing, NZDUSD is exhibiting a tendency to navigate lower in the near-term picture. That said, for additional negative moves to come into fruition, the price would need to manoeuvre below the 0.6742-0.6759 boundary. Alternatively, for buyers to regain some confidence, the pair would need to rise above the 0.7013 high.
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.