NZDUSD maintains its downtrend from the September 20 high of 0.7434 but downside momentum has paused at 0.6817. The short-term bias has shifted to the upside after a strong rebound lifted the pair to 0.6942 earlier today. There were bullish signals on the 4-hour chart, as the market is now trading above the 20 and 50-period moving averages. Oscillators are bullish leaning.
Good support is expected on dips in the near term but if prices break below 0.6817 this would confirm the resumption of the broader downtrend for a move to the next major low at 0.6674.
To the upside, NZDUSD needs to rise above 0.7055 to relieve immediate downside pressure but only a move above key resistance at the psychological 0.7200 level would shift the bias to a more bullish one. Further strength would see another leg up to 0.7343 and open the way for a re-test of 0.7434. At this stage the trend would turn to bullish with scope to target the 0.7557 peak.
The current corrective move may not have enough upside momentum but there are no clear signs of a reversal in the broader downtrend yet. A drop below 0.6817 would put another lower top in place.
