NZDUSD had been steadily regaining ground after finding its feet at the 2023 low of 0.5984 in early June. However, the latest rebound faltered after challenging the upper boundary of the Ichimoku cloud, with the price reversing lower and dropping below both its 50- and 200-day simple moving averages (SMAs)
The momentum indicators currently suggest that the bearish forces are intensifying. Specifically, the RSI is retreating further below its 50-neutral mark, while the stochastic oscillator is sloping downwards near its 20-oversold zone.
If the selling interest intensifies, the pair could descend towards the March bottom of 0.6083. A drop beneath that region could pave the way for the 2023 low of 0.5984. Even lower, the 0.5815 hurdle could provide downside protection.
On the flipside, should the correction cease and the price edge back higher, immediate resistance could be met at the recent rejection region of 0.6246. Conquering this barricade, the bulls might aim for 0.6304 ahead of the four-month peak of 0.6383. Further advances could then cease at the 2023 high of 0.6536.
Overall, NZDUSD has been experiencing a significant pullback in the short term, while its retreat below both the 50- and 200-day SMAs is further darkening the technical outlook. Nevertheless, the decline could accelerate and the pair could revisit its 2023 lows in the case that it crosses below its March bottom.
