Wed, Jun 23, 2021 @ 03:20 GMT
HomeContributorsTechnical AnalysisGBPNZD Breaches Key Support; Positive Picture May be Fading

GBPNZD Breaches Key Support; Positive Picture May be Fading

GBPNZD sellers managed to penetrate below the key support level of 2.0020, which happens to be the 23.6% Fibonacci retracement of the up leg from 1.8275 to 2.0557, the high of May and where the 50-day simple moving average (SMA) presently lies. The strengthening negative momentum is backed by the declining 20-day SMA and its nearing bearish crossover of the flattening 50-day SMA.

The short-term oscillators reflect some stalling but lean towards the downside. The MACD is below its red trigger line and has dipped below the zero line. Additionally, the RSI – despite turning upwards – remains in the bearish territory.

If sellers resurface and steer lower, initial support could come from the 38.2% Fibo of 1.9689. Further selling could drive the price to a fortified support region of 1.9419 to 1.9310, consisting of the 50.0% Fibo and swing low of October 10, while also encapsulating the 200-day SMA. Surpassing this region, the 61.8% Fibo of 1.9150 may halt the decline ahead of the 1.9057 support.

To the upside, immediate resistance comes at the 50-day SMA currently at 2.0020 ahead of the area around the 20-day SMA at 2.0106, where the restricting line and latest swing high also reside. Climbing above, the 2.0330 resistance could halt further gains to reach the October high of 2.0467 and multi-year peak of 2.0557. Conquering the peak, the 2.0690 and 2.1093 resistances, which are the 138.2% and 161.8% Fibonacci extensions of the down leg from 2.0020 to 1.8275 could attract attention.

Overall, a bearish bias is developing in the short-term and a break below 1.9310 would strengthen it.

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