NZDUSD’s decline from the beginning of the year off the peak of 0.6754 has retraced underneath the 200-period simple moving average (SMA), reaching until the 50.0% Fibonacci retracement of the up leg from 0.6239 to 0.6754. Aiding negative momentum is the downward sloping 50-, 100-period SMAs and the Tenkan-sen line which has distanced itself below its Kijun-sen line.
Additionally, the MACD is marginally below its red trigger line deep in the negative region, while the RSI is attempting to reenter the oversold territory. That said, the 50.0% Fibo and supportive trendline could provide a serious deterrent to downside moves, provided that they withstand the current negative picture.
To the downside, immediate pressure comes from the 50.0% Fibo of 0.6496 ahead of the supportive trendline drawn from the multi-year low of 0.6202. Clearing this important area of support, the 0.6464 barrier from November 4 could impede the drop from extending towards the 61.8% Fibo of 0.6436.
Otherwise, if buyers reverse the pair off the 50.0% Fibo of 0.6496, first to hinder the climb, are the fresh swing highs of 0.6536 and 0.6550. Overcoming these, the 50-period SMAs’ area could halt further advances ahead of the tough resistance region above, which involves the Ichimoku cloud encompassing the 100- and 200-period SMAs at 0.6600 and 0.6616 respectively. Keeping in mind, that the high of 0.6628 also fortifies this area of resistance.
Overall, the short-term picture remains bearish, while the 50.0% Fibo and trendline will reveal the next direction.
