NZDUSD has been stuck in a steep downtrend after posting a fresh five-month high of 0.6410 in mid-July. Despite trading flat for the past two weeks, the pair dropped to a fresh nine-month bottom of 0.5858 in yesterday’s session before paring back some losses.
The momentum indicators are heavily tilted to the bearish side. The RSI is hovering near its 30-oversold mark, while the stochastic oscillator is also negatively charged near its 20-oversold territory.
Should the downward spike extend, the price could initially face 0.5730, which is the 78.6% Fibonacci retracement of the 0.5510-0.6536 upleg. A violation of that zone could pave the way for the October 2022 support of 0.5598. Further declines could then come to a halt at the October 2022 bottom of 0.5510.
On the flipside, bullish actions may encounter immediate resistance at the 61.8% Fibo of 0.5902. Piercing through that wall, the pair could advance towards the 50.0% Fibo of 0.6023 before the 38.2% Fibo of 0.6144 gets tested. Even higher, the 23.6% Fibo of 0.6294 might curb the pair’s upside.
Overall, NZDUSD sank to a fresh 2023 low after a hard battle around the 61.8% Fibo of 0.5902. For the bulls to regain some confidence, the price needs to reclaim that region.
