NZDUSD was steadily regaining ground after experiencing a pullback from its three-month peak of 0.6383. However, the pair retraced lower on the back of the RBNZ’s signal of a potential end to its monetary tightening cycle, with the price temporarily pausing its drop around the 200-day simple moving average (SMA).
The momentum indicators currently suggest that bearish forces are intensifying. Specifically, the MACD dropped beneath its red signal line but remains above zero, while the RSI is ticking downwards after crossing below its 50-neutral mark.
Should the selling interest persist and the price violates the 200-day SMA, the April low of 0.6110 could provide downside protection. A break below that region may open the door for the 2023 bottom of 0.6083. Further declines might then cease at the 0.5815 hurdle.
On the flipside, if the pair attempts to recoup some losses, the previous support of 0.6181 may act as initial resistance. Surpassing that zone, the price might ascend towards 0.6304 or higher to challenge the three-month high of 0.6383. Conquering this crucial barricade, the bulls could attack the 2023 peak of 0.6536.
Overall, NZDUSD has sliced through important technical levels such as the 50-day SMA and the Ichimoku cloud following the RBNZ’s dovish statements. Nevertheless, things could get even worse, with the retreat potentially expanding in the case that the price closes beneath its 200-day SMA.
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