NZDUSD edged sharply lower today following the bounce off the 0.6805 resistance level, driving the pair below the 23.6% Fibonacci retracement level of the downleg from 0.7060 to 0.6686, around 0.6775. This week, the pair is on the backfoot and the technical indicators suggest that the market could ease a little bit in the short-term.
The technical structure suggests that an aggressive sell-off is in progress. The RSI indicator slipped below the threshold of 50 and is moving towards the 30 level, while the MACD oscillator dropped below its trigger line but remains close to the zero line.
If the price dives below the lower Bollinger Band near 0.6742, it could challenge again the 0.6725 support level. Steeper decreases could drive the pair south towards the more than one-year low of 0.6686, taken from the low on July 3.
On the flip side, if the price climbs above the 23.6% Fibonacci (0.6775) in the next few sessions, immediate resistance could be met at the 0.6805 high. A significant close above the latter would touch the 38.2% Fibonacci of 0.6828, raising chances for further increases.
Overall, NZDUSD remains in a bearish picture in the medium-term as it failed to complete a significant upside retracement movement.
