In the currency market on Friday, the NZD/USD pair faced downward pressure, losing ground to reach a level of around 0.5760. This came after it had managed to trim some of its losses from earlier highs near 0.5850. The pair has been unable to break through the resistance posed by the 20-day Simple Moving Average (SMA), which is currently hovering close to 0.5890. This has been a significant factor in capping its upward movement, with persistent selling activities preventing any sustained rally.
Technical analysis reveals a rather bleak picture for the NZD/USD pair. The Relative Strength Index (RSI) is currently at 34, dangerously close to oversold levels and still showing a downward trend, highlighting the weakness in the pair’s performance. Additionally, the Moving Average Convergence Divergence (MACD) histogram is now displaying rising red bars. This is a clear indication that the bearish momentum is not only present but is also intensifying, despite the pair’s sporadic attempts to recover some of its losses.
As the NZD/USD continues its downward drift, the immediate support level is expected to be around the 0.5750 region. If the selling pressure persists, the psychological mark of 0.5700 could come into play. On the upside, for the bulls to regain control and reverse the current bearish sentiment, a decisive break above the 20-day SMA would be essential. This would not only signal a potential shift in the market dynamics but also open up opportunities for the pair to climb higher.
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