NZDUSD maintains a bearish bias since declining steadily from the September 20 peak of 0.7434. Downside pressure in the market increased after the bearish crossover of the 20 and 50-period moving averages on the 4-hour chart.
The recent sharp decline has shown signs of exhaustion, with RSI at oversold levels, as the market pauses just above 0.6860. This level will act as immediate support and a break below it would open the way towards 0.6817 (May 11 low) before proceeding to 0.6674 (May 30 low).
NZDUSD needs to rise back above key resistance at 0.7200 in order to ease downside pressure. Gains through this key level would see prices move towards 0.7343 resistance and then a re-test of 0.7434. From here, the market would be on track for a rise towards the multi-year peak of 0.7557.
On the 4-hour chart, risk is clearly tilted to the downside, with the downtrend still in progress. Only a move back into the 0.7200 handle would indicate the downtrend has ended.
