NZDUSD Worsens Bearish Status Below Channel
NZDUSD plunged below the 10-month-old descending channel early on Thursday, powering its broad bearish trend towards an almost 15-month low of 0.6594.
Oversold conditions are present according to the RSI and the Stochastics, though the former is just piercing its 30 level and the latter shows no sign of improvement below 20. Hence, an upside reversal in the price could come with some delay, as the negative momentum in the MACD also reflects.
A close below the 0.6600 round level could generate additional losses towards the 0.6500 number. This is where the 50% Fibonacci retracement of the 2017 – 2020 downtrend is positioned. Therefore, another violation here could confirm a continuation towards the 0.6380 support region from June 2020.
In the event of a false channel breakout, where the pair recoups its latest downfall and returns above 0.6640, the 0.6700 resistance may attempt to block the way to the broken short-term ascending trendline and the 20-day simple moving average (SMA), both currently at 0.6760. The constraining 50-day SMA is converging towards that region too. Nevertheless, if that strong wall collapses, the rally could pick up steam towards the previous high of 0.6889 and the 38.2% Fibonacci.
Summarizing, NZDUSD has worsened its bearish status in the short- and long-term timeframes by falling below 0.6640. While the violation still requires confirmation, a decisive close below 0.6600 is expected to activate a new selling round.
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