The NZD/USD currency pair is experiencing an upward trend for the second consecutive session, trading at approximately 0.5980 during the European trading hours. However, it remains within a descending channel pattern, suggesting a prevailing bearish sentiment. Analysts indicate that a breakthrough above this channel could signify a change in the current momentum.
Technical indicators reinforce the negative outlook for NZD/USD. The nine-day Exponential Moving Average (EMA) is positioned below the 14-day EMA, indicating ongoing downward pressure on the pair in the near term. Additionally, the 14-day Relative Strength Index (RSI) is hovering just above the critical level of 30. A drop below this level could trigger a diagnosis of oversold market conditions, hinting that a corrective rally may be on the horizon.
Looking at potential support levels, NZD/USD may test the lower boundary of the descending channel close to the 0.5920 level. A decisive break beneath this support could lead the pair to a further pullback support level around 0.5850, indicating a continued downturn if this support is breached.
On the resistance front, the initial obstacle for NZD/USD stands at the upper boundary of the descending channel, coinciding with the nine-day EMA at approximately 0.6001. The subsequent resistance level lies at the 14-day EMA, projected at 0.6026. A sustained advance beyond these moving averages could shift the sentiment toward a more bullish perspective, possibly targeting the psychological barrier of 0.6100.
As traders monitor these levels, the balance between support and resistance will be crucial in determining the future direction of the NZD/USD pair in the coming sessions.
