NZDUSD could not find enough buyers to overcome the 0.7100 level last week, with the spotlight shifting again towards the new 7-month low of 0.6921 following the close below the simple moving averages (SMAs).
Encouragingly however, the RSI and the MACD continue to hold above their recent lows, while the latter has also managed to crawl back above its red signal line, providing some optimism that the bulls may not give up the battle yet.
The 0.7072 number, where the 20- and 200-day SMAs converge, could challenge any bullish attempts towards the 0.7120 area. The bottom of the Ichimoku cloud is also in the neighbourhood. Hence, any breakout at this point may gather extra interest, with the price likely speeding up to 0.7200 in the aftermath – a key barrier during the 2017 – 2018 period. The 0.7300 handle could next come on the radar, though only a rally above the 0.7463 top can restart buying confidence in the medium- and long-term picture.
Alternatively, an extension below 0.6921 will strengthen the case for a down-trending market, likely activating a fresh bearish wave towards the 0.6800 level. Failure to hold above that floor could cause another negative extension towards the 0.6682 – 0.6600 restrictive region.
In brief, although the fresh 7-month low has downgraded the short-term outlook to slightly bearish, upside corrections cannot be ruled out in the near term according to the technical indicators.
