NZDUSD is in a bearish phase after the decline from the 0.7434 peak of September 20. Studies on the 4-hour chart show that a bearish signal was given by the crossover of the 20-period moving average below 50-period MA on September 26. The sharp slope downwards of the 20-period MA is indicating increased downside risk for the pair.
NZDUSD was not able to sustain gains at 0.7434 despite breaking above what was a strong resistance level at 0.7340. The pair fell back below this level on September 21 and despite an attempt to breach it again on September 22, prices fell back down and below the two moving averages.
RSI is in bearish territory below 50 although the indicator is not showing any clear direction at the moment, suggesting a consolidation phase in the near term for NZDUSD. The pair is expected to move sideways for now and remain supported ahead of 0.7180. However, the risk is to the downside and there is scope for a further extension lower to target the August 31 trough of 0.7131.
Looking at the bigger picture, the market is in a neutral bias after the downtrend from the July top of 0.7557
