NZDUSD continued the trickle downwards to retest the forty-two month low of 0.6376, after failing to overcome the past inside swing resistance of 0.6487 from June 14. The bulls came on board and pushed the pair back above the 0.6376 level, something also reflected in the RSI, which shows negative momentum decreasing.
Despite the RSI’s view, the MACD has declined below its red trigger line suggesting the negative outlook could return. Furthermore, the 50-, 100- and 200-period simple moving averages (SMAs) on the four-hour chart are sloping downwards, also indicating that the negative bias could endure.
In a negative scenario, pushing below 0.6376 level, the pair could come to test the support of 0.6345, which will be a forty-three month low back from 20 January 2016. If negative pressure increases the next support may be found at 0.6330, which is the 138.2% Fibonacci extension of the up wave from 0.6376 to 0.6500.
If the bulls win the current battle, the price could shove up to meet initial resistance from the 50-period SMA currently at 0.6430. Moving higher into the Ichimoku cloud, the 0.6470 resistance which is the 23.6% Fibo retracement level of the down leg from 0.6789 to 0.6370, could need some muscle to fracture. Surpassing the 0.6500 hurdle could see the previous swing highs of 0.6556 and 0.6587 be tested.
Overall the short-term bias is bearish, but a shift above 0.6587 swing high could turn the picture to neutral.
