NZDUSD has been in a declining mode after the pullback off the three-and-a-half-year high of 0.7463, sending the price beneath the 23.6% Fibonacci retracement level of the up leg from 0.5470 to 0.7463 at 0.6995. However, the RSI is mirroring the latest rising move and is pointing upwards near the neutral threshold of 50, while the MACD is extending its positive bias above its trigger line.
The 0.7000-0.7100 area, where the 20- and 200-day SMAs reside, could challenge any bullish attempts. The descending trend line is also in the neighborhood, holding near the 0.7175 barrier. Hence, any breakout at this point may gather extra interest, with the price likely speeding up to 0.7313 before the 0.7463 resistance come on the radar.
Alternatively, an extension lower would strengthen the case for a down-trending market, likely activating a fresh bearish wave towards the eight-month low of 0.6880 and 0.6800. Failure to hold above that floor could case another negative extension towards the 38.2% Fibonacci of 0.6700.
In brief, although the eight-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.
