HomeContributorsTechnical AnalysisNZDUSD Worsens Bearish Status Below Channel

NZDUSD Worsens Bearish Status Below Channel

NZDUSD plunged below the 10-month-old descending channel early on Thursday, powering its broad bearish trend towards an almost 15-month low of 0.6594.

Oversold conditions are present according to the RSI and the Stochastics, though the former is just piercing its 30 level and the latter shows no sign of improvement below 20. Hence, an upside reversal in the price could come with some delay, as the negative momentum in the MACD also reflects.

A close below the 0.6600 round level could generate additional losses towards the 0.6500 number. This is where the 50% Fibonacci retracement of the 2017 – 2020 downtrend is positioned. Therefore, another violation here could confirm a continuation towards the 0.6380 support region from June 2020.

In the event of a false channel breakout, where the pair recoups its latest downfall and returns above 0.6640, the 0.6700 resistance may attempt to block the way to the broken short-term ascending trendline and the 20-day simple moving average (SMA), both currently at 0.6760. The constraining 50-day SMA is converging towards that region too. Nevertheless, if that strong wall collapses, the rally could pick up steam towards the previous high of 0.6889 and the 38.2% Fibonacci.

Summarizing, NZDUSD has worsened its bearish status in the short- and long-term timeframes by falling below 0.6640. While the violation still requires confirmation, a decisive close below 0.6600 is expected to activate a new selling round.

XM.com
XM.comhttp://clicks.pipaffiliates.com/c?c=231129&l=en&p=0
XM is a fully regulated next-generation financial services provider of online trading on currency exchange, commodities, equity indices, precious metals and energies, with services to clients from over 196 countries worldwide. Founded in 2009 by market experts with extensive knowledge of the global forex and capital markets and with the aim to ensure fair and reliable trading conditions for every client, XM has reached international recognition by virtue of its unbeatable execution of orders, spreads as low as zero pips on over 50 currency pairs, gold and silver, flexible leverage up to 888:1, and personalized customer engagement to foster clients’ success.

Featured Analysis

Learn Forex Trading