NZDUSD is consolidating between 0.7200 and 0.7340. The bounce from the August 31 low of 0.7131 lost steam and failed to rise above what has been a key resistance level at 0.7340. The intra-day risk is to the downside as the Tenkan-sen line has crossed below the Kijun-sen line on the 4-hour chart. RSI is in bearish territory after dipping below 50 but downside momentum has weakened as the oscillator is now flat. The Ichimoku-cloud analysis on the 4-hour chart shows the market is still above the cloud which is expected to provide support in the near term. Price action is essential sideways since the beginning of this week above the key 0.7200 level. Breaking below this support would increase downside pressure to open the way to the August 31 low of 0.7131. Such a move would place a short-term top at the September 8 high of 0.7337 and strengthen the longer-term downtrend that started from the 0.7557 July peak. NZDUSD would need to regain the 0.73-handle to ease downside pressure. Breaching 0.7337 resistance (September 8 high) would shift focus to the upside to target 0.7390. From here the odds increase for a move to re-test the 0.7557 peak. The market maintains its underlying trend to the downside on the longer run timeframe. For now, the bounce from 0.7131 could be seen as a corrective move unless there is a sustained rise above 0.7340.
