NZDUSD pierced the 0.6700 whole number before inching down on Tuesday, stretching its upward pattern to an almost 8-month high.
With the RSI having topped twice just below its 70 overbought mark, and the Stochastics shifting south from their 80 level, weakness could persist in the short-term.
If that is the case, the area around the 20-day simple moving average (SMA) at 0.6580 could immediately attract attention given its resilience to downside and upside pressures in the past. A break below that zone could bring another key barrier at 0.6480 into view, while lower, a drop below 0.6380 could trigger a more aggressive sell-off, violating the uptrend at the same time.
Should the bulls regain strength, the price may head for the December high of 0.6754, a break of which could boost it towards the 0.6912-0.6970 resistance zone. Such a move would also upgrade the neutral outlook in the bigger picture to a positive one.
In brief, NZDUSD is expected to hold a positive-to-neutral bias in the short-term. A close below 0.6580 could give the lead to the bears.
