NZDUSD has come under renewed selling pressure today, falling back below the downward sloping simple moving averages (SMAs). Despite the latest pullback though, the index has not posted a session below 0.6780, which makes one hesitant to trust further declines for now. However, looking at momentum oscillators, they suggest further losses in the near term. The RSI slipped into negative zone, while the MACD remains below its trigger line.
In case of further declines in the pair, immediate support is coming from the 23.6% Fibonacci retracement level of the upward movement from 0.6423 to 0.6882, around the 0.6780 support. If sellers manage to push below that hurdle, that would mark a drop towards the 38.2% Fibonacci of 0.6705, increasing the probability for bearish extensions.
On the upside, if the bulls retake control, price advances above the 20- and 40-SMAs may stall initially near the resistance area between 0.6870 – 0.6882. A potential upside violation of this region is raising chances for more advances until the 0.6920 barrier, reached on June 25.
Overall, the very short-term outlook appears bearish, however, over the last one-and-a-half-month, it has been shifting from bearish to a more bullish one.
