NZDUSD has been in a prolonged downtrend since March when it peaked at the 0.7032 region. Although the price has managed to regain some lost ground after its downfall ceased at the 26-month low of 0.6069, its latest rebound was recently rejected at the lower boundary of the Ichimoku cloud.
The short-term oscillators suggest that bullish forces remain in control, but positive momentum is waning. Specifically, the RSI is hovering slightly beyond the 50-neutral mark despite its latest drop, while the MACD histogram is found above both zero and its red signal line.
If buying interest intensifies, the recent peak of 0.6350, which overlaps with the lower limit of the Ichimoku cloud, could act as immediate resistance. Piercing through this region, the bulls could challenge 0.6398 before the spotlight turns to the June high of 0.6575. Conquering this barricade, the price might ascend to test the 0.6930 hurdle.
On the flipside, any downside moves could initially stall at 0.6190. Diving beneath that region, the 26-month low of 0.6059 may prove to be a tough obstacle for the bears to overcome. A violation of the latter could send the price to fresh multi-year lows, where the May 2020 low of 0.5920 could be the next support region.
Overall, even though NZDUSD’s short-term picture has been improving, its recovery seems to be running out of steam. Therefore, a clear break above the 0.6350 ceiling is needed to signal the resumption of the pair’s latest recovery.
