NZDUSD has been in a extended downtrend since March when it peaked at the 0.7032 region. Although the price has managed to regain some lost ground after its downfall ceased at the 26-month low of 0.6069, it is currently being held down by the congested region that includes its 50-day simple moving average (SMA) and the upper Bollinger band.
The short-term oscillators suggest that the positive momentum is waning. Specifically, the RSI has crossed below its 50-neutral threshold, while the stochastic oscillator is descending after being rejected at the 80-overbought area.
To the downside, bearish actions could send the price to test the June support of 0.6195. Further downside pressure may then open the door for the 26-month low of 0.6059. A violation of the latter could send the price to form fresh multi-year lows, where the May 2020 low of 0.5920 could be the next support region.
On the flipside, if buying interest intensifies, the recent peak of 0.6305, which overlaps with the 50-day SMA, could act as immediate resistance. Piercing through this region, the bulls could challenge 0.6398 before the spotlight turns to the June high of 0.6575. Higher, 0.6930 might prove to be a tough barrier for the price to overcome.
Overall, even though NZDUSD’s short-term picture has been improving, its recovery seems to be running out of steam. Therefore, a clear break above its 50-day SMA is needed to signal the resumption of the pair’s latest rebound.
