NZD/USD Price Analysis: Further decline observed as the pair fails to hold the 20-day SMA
|- The NZD/USD slips further below the 20-day SMA as bears reinforce their strength.
- Daily chart indicators suggest an ongoing consolidation phase, marked by a slight negative momentum following last Wednesday’s push.
- The pair fell to a low of 0.6105 but bulls managed to clear most of its losses.
The NZD/USD continued its descent on Monday, moving below the 20-day Simple Moving Average (SMA) of 0.6140 the buyers managed to clear most of its daily losses. The pair seems to be stuck in a state of consolidation following the sharp surge last week to 0.6220. Despite buyers' attempts, the 20-day SMA could not be sustained, and losses could potentially extend if this trend continues.
Meanwhile, on the daily chart, the Relative Strength Index (RSI) has maintained its negative momentum, suggesting a faltering buying pressure. The downward orientation of the RSI is consistent with the flat red bars displayed by the Moving Average Convergence Divergence (MACD), further emphasizing the ongoing consolidation narrative.
NZD/USD daily chart
The NZD/USD's immediate resistance level stands at the 20-day SMA of 0.6140. Simultaneously, the convergence of the 100 and 200-day SMAs in the 0.6050-0.6060 region builds a sturdy support base for the pair, which is likely to aid in correction should the bears seize control. Movements below this convergence point could indicate sell conditions.
Furthermore, the main resistance continues to stand at the 0.6200 level. A breach at this point could be viewed as a buy signal, signaling an overturn of the bearish sentiment.
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