NZDUSD has a negative undertone as the flow is back to the downside following a break below the key 0.6900 level.
On the 4-hour chart, the RSI is bearish while the 20 and 50-period moving averages are negatively aligned.
The rapid pullback from yesterday’s 0.6916 high suggests NZDUSD does not have enough momentum to resume the uptrend from 0.6780 to 0.6945 (November 17-28 rise).
As long as NZDUSD remains above the 0.6816 low then the pair is expected to remain neutral and to consolidate the recent gains. A move back above 0.6900 would shift focus back to the upside to target 0.6916 and set the market on a path towards 0.7000.
Meanwhile, breaking below the 0.6816-0.6800 zone could see a re-test of the 0.6780 low and likely see the start of a new downtrend.
The fact that the market has retraced more than 61.8% of the 0.6780 to 0.6945 upleg keeps the NZDUSD vulnerable to additional weakness.
