NZDUSD has maintained a bearish phase in the short term since September 20. Risk is clearly tilted to the downside and further weakness in the market could see prices drop another leg lower to extend the bearish phase from the 0.7434 high.
For now, downward momentum has weakened as RSI and MACD are flat on the 4-hour chart. Both indicators in bearish territory which keep the possibility for NZDUSD moving lower again.
Prices declined steadily from the 0.7434 high before steadying around the key psychological level at 0.7200. Then there was a sharp decline from 0.7205 earlier this month. A daily close below 0.7131 (August 31 low) would indicate that the market has moved into a bearish phase with the next target at 0.7055. Breaking below the key 0.7000 area would increase downside pressure and the focus would turn to the next major low at 0.6817.
A rise above 0.7200 would help the market challenge the September 29 high at 0.7243. NZDUSD would need to rise above the 50-period moving average at 0.7290 to see a more sustained reversal in the current trend and give scope to target the September 20 peak at 0.7434.
The September 26 bearish crossover of the 20-period MA with the 50-period MA on the 4-hour chart puts near-term risk squarely on the downside. Only a move back above 0.7200 would ease immediate pressure.