The NZD/USD currency pair is currently navigating towards a potential test of the upper edge of its descending channel pattern, situated near the 0.6000 level. Analysis of momentum indicators, particularly the 14-day Relative Strength Index (RSI), suggests a prevailing bearish sentiment, with the RSI resting below the neutral level of 50. As of the early European trading session on Tuesday, the pair has managed to halt a two-day decline, trading around 0.5990; however, overall market dynamics indicate continued bearish pressure.
The ongoing bearish outlook is underscored by the positioning of the nine-day Exponential Moving Average (EMA), which remains below the 14-day EMA, further indicating a negative trend for the NZD/USD pair. This signifies weak short-term momentum, implying that downward pressure may persist. Immediate support for the currency pair lies at a three-month low of 0.5939, and a breach beneath this level could invite further declines, potentially targeting the lower boundary of the descending channel at approximately 0.5910. Following this, a critical psychological support level to watch will be around 0.5900.
On the resistance front, the NZD/USD pair faces initial resistance at the nine-day EMA near the 0.5990 mark. If the pair succeeds in moving above this level, it may encounter additional resistance near the upper channel boundary, which aligns with the 14-day EMA at about 0.6010. Should the pair break through this resistance, it could then explore higher levels, including the significant psychological resistance at 0.6100. In summary, traders should remain attentive to these key levels as they navigate the current market landscape.
