NZD/USD experienced a sharp decline overnight, attributed largely to a vigorous rebound seen in Dollar. Bearish momentum for the pair continued into Asian session, further weighed down by disappointing manufacturing data from New Zealand.
From a technical standpoint, price actions stemming from 0.5858 short term bottom appear to have a corrective structure. The pronounced drop seen today suggests the possibility that this corrective phase might have concluded at 0.6054, just shy of 38.2% retracement of 0.6410 to 0.5858 at 0.6069.
Near term focus is now turned to 0.5858 low. Decisive break there will confirm resumption of whole down trend from 0.6537. Next target is 61.8% projection of 0.6410 to 0.5858 from 0.6054 at 0.5713.
In the event of recovery, 0.6054 resistance remains pivotal. As it stands, unless this level is surpassed, any recovery attempts are likely to be short-lived, keeping the bearish bias intact.
