The NZD/USD currency pair is currently experiencing a downward trend as it moves within a defined descending channel. This trend reinforces an overall bearish outlook, with technical indicators supporting the notion of a prolonged decline. Specifically, the nine-day Exponential Moving Average (EMA) is positioned below the 14-day EMA, suggesting persistent bearish pressure. Currently, the pair is trading at approximately 0.5970, indicating a lack of momentum for the fourth consecutive session.
Market analysis shows that short-term momentum remains weak, with the daily chart indicating a continued downward trajectory. The Relative Strength Index (RSI), a critical measure of market momentum, is hovering just above the 30 level. If the RSI dips below this level, it could indicate oversold conditions, potentially leading to a corrective rally for the pair in the near future.
From a technical perspective, the NZD/USD pair may soon test the lower boundary of the descending channel, situated around 0.5930. A significant breach of this support level could trigger further declines, possibly drawing the pair towards the pullback support near 0.5850.
On the resistance front, the first level to watch is the upper boundary of the descending channel, which aligns with the nine-day EMA around 0.6006. Should the pair manage to surpass this resistance, the next significant hurdle would be the 14-day EMA at 0.6033. A sustained breakthrough above these moving averages could alter the current outlook, shifting the NZD/USD pair to a temporary bullish direction, with a potential target of reaching the psychological level of 0.6100.
