NZDUSD has jumped into the Ichimoku cloud over the last few sessions as it found strong support around the 0.6505 barrier. The price touched the 40-simple moving average (SMA) in the 4-hour chart, and returned lower again, while the RSI indicator is also pointing down in the negative region. What remains to be seen is if the bears have enough fuel to continue the sharp negative movement or change the bearish bias to neutral.
A move below the 40-SMA could open the way towards the immediate support of 0.6505. Should the price break the line to the downside, the spotlight would turn next to the seven-month low of 0.6482, achieved on May 23.
In the alternative scenario, the pair may retry to surpass the upper surface of the Ichimoku cloud and the 20-SMA around the 23.6% Fibonacci retracement level of the bearish movement from 0.6780 to 0.6482 near 0.6553. If the attempt proves successful, the next target would be higher at 0.6580, taken from the highs on May 16.
To sum up, in the very short-term NZDUSD has been in a narrow range of 0.6505 – 0.6553. However, only a close below the seven-month low would endorse the downward structure again.
