NZDUSD has been trending lower since March, generating a profound structure of lower highs and lower lows. Moreover, in the past few sessions, the technical picture has deteriorated even further, with the price recording a fresh 30-month low of 0.5563.
The momentum indicators are currently deep within their bearish areas, which could also signal that a rebound is imminent. The RSI is descending in the 30-oversold zone, while the stochastic oscillator has eased within its 20-oversold territory.
Should selling pressures intensify, the price could encounter support at the March 2020 bottom of 0.5468. If that floor collapses, the pair will dive towards levels not seen in the past 13 years, where the November 2008 support of 0.5186 could provide downside protection. Failing to halt there, the January 2009 low of 0.4890 may halt any further drops.
To the upside, bullish actions could send the price to test 0.5750. Crossing above this region, the pair might ascend towards the July low of 0.6060 or higher to challenge the recent resistance zone of 0.6160. Piercing through the latter, the August high of 0.6457 could prove to be a tough obstacle for the pair to overcome.
Overall, even if NZDUSD has come under tremendous downside pressure, the momentum indicators currently suggest that the market has reached oversold levels. Therefore, it wouldn’t be a surprise if the pair experienced an upside correction soon.