The NZD/USD currency pair remains entrenched in a descending channel pattern, indicative of a prevailing bearish sentiment. Currently, the pair is hovering around the 0.5650 level during European trading hours, reflecting continual downward pressure. Technical indicators suggest that the momentum in the short term is weak, with the pair trading below both the nine- and 14-day Exponential Moving Averages (EMAs).
Further analysis reveals that the 14-day Relative Strength Index (RSI) is positioned below the 30 level, suggesting the pair is oversold. This situation may pave the way for a potential upward correction. However, immediate support levels to watch include the lower boundary of the descending channel at 0.5630, followed closely by a significant 26-month low at 0.5607, observed in December.
On the other hand, resistance points are identified at the nine-day EMA, situated at approximately 0.5708, and the 14-day EMA at around 0.5743. A decisive break above the latter could signify an improvement in short-term momentum, potentially allowing the pair to challenge the upper boundary of the descending channel around the 0.5800 level.
As the New Zealand dollar continues to navigate these market conditions, observers will be keenly watching price movements in the coming sessions to gauge whether a reversal is imminent or if the bearish trend will persist. The ability to breach key resistance levels could provide crucial insight into the pair’s future trajectory.
