NZD/USD technical analysis: Buyers resurface at 7-month support level
|NZDUSD is forming some positive traction off a bounce at the 7-month low of 0.6922, that being the most significant trough since the pair adopted a downwards trajectory from the 3-month high of 0.7315. The bearish simple moving averages (SMAs) are endorsing negative tendencies, while the Ichimoku lines are reflecting that sellers still have a slight upper hand.
The short-term oscillators are indicating a recent uptick in bullish sentiment and are signaling that buyers may try to counter the negative tilt in the pair. The MACD is below zero and is flattening underneath its red trigger line, while the RSI is heading higher in the bearish zone, after a rebound near the 30 levels. The bullish bearing of the stochastic oscillator is also promoting more positive price action.
If price’s push off the low of 0.6922 accelerates past the red Tenkan-sen line at 0.6958, buyers may then face a tough resistance section between the 50-period SMA at 0.6697 and the Ichimoku cloud at 0.7022. Conquering the cloud, the pair may then test the 0.7060 high. Breaching this too could fuel buyers’ belief in recapturing the area above the 0.7085-0.7104 boundary. Note that a jump above the 0.7100 handles and the adjacent 200-period SMA at 0.7107 could boost positive forces.
If selling interest increases again, initial hardened support could emanate from the now tested twice low of 0.6922. Diving below this durable barrier, the bears may encounter a zone of downside constraints shaped between the November 2020 lows of 0.6896 and 0.6875. Sinking further from here could then aim sellers’ radars towards the 0.6794-0.6809 barricade, the latter being the border that had been broken to the upside back in November 2020, which resulted in a four-month steady rally that reached a 43-month peak of 0.7464.
Summarizing, NZDUSD is currently ranging between the 0.6922 floor and the ceiling of 0.7085-0.7104. A break either below the bottom or above the top could set the next near-term direction into motion.
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