NZDUSD has a bias that is tilted to the downside during the past week, with trend indicators supporting this view. A bearish crossover of the 20 with the 50-period moving average on the 4-hour chart and an RSI below 50 are indicators of weakness in the market.
Looking at the broader picture, NZDUSD is in a downtrend and has been consolidating a decline from 0.7434 and pausing at a low of 0.6817 on October 27. The market has consequently been moving sideways and capped at the 23.6% Fibonacci level (0.6961) of the downleg from 0.7434 to 0.6817. After several tests of this level, prior upside momentum was not sustained, and prices fell back down. The target is 0.6817, which if broken would increase downside pressure and confirm a resumption of the downtrend for a move towards 0.6674.
With upside momentum non-existent in the near-term, it would be quite a challenge to rise above what is key resistance at 0.6817. But if successful, the market’s focus would shift back to the upside to target the 0.7000 handle. But only a move above 0.7200 would invalidate the short-term downtrend.
