NZD/USD Price Analysis: Drops to 3-week lows, seems vulnerable to slide further
|- NZD/USD remained under some selling pressure for the second straight session on Wednesday.
- The set-up favours bearish traders amid the overnight breakthrough 0.6000 confluence support.
The NZD/USD pair finally broke down of its daily consolidative trading range and dropped to three-week lows, around the 0.5960 region during the mid-European session on Thursday. The follow-through selling for the second consecutive session adds credence to the overnight bearish break below the key 0.60 psychological mark.
The mentioned level marked an important confluence support comprising of 50-day SMA and the lower end of a multi-week-old ascending trend-channel. The breakdown is further reinforced by the fact that technical indicators on the daily chart (RSI and MACD) have just started drifting into the negative territory.
Hence, an extension of the ongoing slide, further towards testing the 0.5910-0.5900 support zone, now looks a distinct possibility amid a sudden pickup in the USD demand. The USD caught some aggressive bids in the last hour after the US President Donald Trump said that having a strong dollar was a great thing.
On the flip side, confluence support breakpoint near the 0.6000 mark should now keep a lid on any attempted recovery. That said, a sustained strength above the said hurdle might prompt some near-term short-covering move and lift the pair further towards the 0.6070-75 intermediate resistance en-route the 0.6100 mark.
NZD/USD daily chart
Techical levels to watch
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