HomeContributorsTechnical AnalysisNZDUSD Erases Yesterday's Rally; Could Weaken Further

NZDUSD Erases Yesterday’s Rally; Could Weaken Further

NZDUSD is continuing the selling interest despite the bounce off the 0.6156 support level in the preceding session. The price holds near the lower boundary of the Ichimoku cloud, while the 20- and 40-day simple moving averages (SMAs) are pointing downwards. The MACD oscillator is heading south as well, holding in the negative region. However, the stochastic oscillator posted a bullish crossover in the oversold area, suggesting the end of the bearish move.

Should the pair stretch south, Tuesday’s low of 0.6156 could provide immediate support before the pair touches the 26-month low of 0.6060. A significant step lower could bring the bearish sentiment back into play, sending the price probably towards 0.5920, which was a strong barrier back in May 2020.

On the flip side, the 20- and 40-day SMAs currently at 0.6240 and 0.6290 respectively may halt upside movements. If traders continue to buy the pair, the price could rise until the 0.6470 barrier, while steeper increases could also touch the 200-day SMA near 0.6570.

In the medium-term picture, NZDUSD has been trading bearish in the past four months and only a climb beyond the 200-day SMA may switch this outlook to bullish.

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