NZDUSD has shifted its near-term bias to bearish after dropping sharply to break key support at 0.7055. The odds are high for a move towards the next major low in the 0.6800 area.

On the 4-hour chart, RSI has fallen into bearish territory below 50, indicating momentum is tilted to the downside. Price action is currently below the 20 and 50-period moving averages, which also highlights increased downside pressure in the market.

The market has been in a downtrend since falling from the July peak of 0.7557. NZDUSD needs to rise back above key resistance at 0.7200. From here, the focus would shift back to the upside to target the next resistance level at 0.7343 and ahead of the 0.7434 high.

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NZDUSD is at risk of putting in another lower top at 0.7210 if price action continues to fall below 0.7055.

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