NZDUSD continued its retreat in January reaching a 16-month low amid strong negative forces. Moreover, the pair is currently trading way below its 50- and 200-period simple moving averages (SMA), with the former crossing below the latter, reinforcing fears of a sustained bearish outlook.
Short-term momentum indicators are reflecting a mixed picture as the RSI is located below its 50 neutral mark. However, the MACD is found above its red signal line despite being in negative territory, which indicates that the negative momentum might be fading.
Should the bears maintain control, initial support might be found at the 0.6528 hurdle. Crossing below this point could intensify selling pressures, opening the door towards the September 2020 low at 0.6510. A break below the latter might shift seller’s attention towards the August 2020 low at 0.6488.
On the flip side, initial resistance might be found at the November 2020 low at 0.6588, before buyers eye the 0.6659 obstacle. A decisive move above this point could send the price to test the 50-period SMA currently at 0.6679. Surpassing the latter could turn the fortunes around for the pair, sending the price to test the December low at 0.6700 and the 0.6733 barrier, consecutively.
In brief, the short-term outlook for the pair is bearish. For sentiment to change, buyers would need to break above the 50-period SMA.
