NZDUSD is continuing last week’s bounce, posting a new three-month low of 0.6580 and at the same time is in progress to confirm another lower low in the short-term. The short-term bias looks negative as prices are developing beneath the Ichimoku cloud and the 20- and 40-simple moving averages (SMAs). The MACD keeps losing ground below its trigger line, while the RSI seems to be flat in the oversold area.
Should the price strengthen its bearish momentum, the 0.6560 support could provide immediate support. Moving lower, the focus could shift to the 0.6505 support, identified by the bottom on October 2018.
In the alternative scenario, traders would be eagerly looking for a break above the red Tenkan-sen line of 0.6680 to increase buying orders. If that’s the case, the rally could last until 0.6720, which stands near the 20-SMA.
The recent bearish action turned the bigger picture more negative as well and with the shorter-term moving averages (MA) increasing distance above the longer-term MAs we could expect further downward extension in the market.
