NZDUSD has come under renewed selling pressure, completing a new 4-month low of 0.7055 earlier today. The pair has been plunging over the last seven trading days, losing more than 300 pips. Furthermore, the price slipped below the significant level of 0.7140, signaling a strong bearish sell-off.
Looking at momentum oscillators on the 4-hour chart, they suggest a possible retracement of the last aggressive downward movement. The RSI indicator is sloping upwards in the oversold zone, while the %K line of the stochastic oscillator posted a bullish crossover with the %D line in the negative territory.
In case of a potential upward pullback, the price could meet the 20-simple moving average around the 0.7100 psychological level in the short-term. A successful surpass of this barrier could open the door towards the 0.7140 – 0.7152 critical area.
On the flip side, if the bears retake control, price declines may stall initially near the 0.7030 support level, taken from the high on December 15 of 2017. If the market fails to hold above this level, the next stop could be at the 0.6950 hurdle identified by the low on December 20 of 2017.
