NZD/USD Price Analysis: Plummets to multi-day lows, risks breaking below 0.6600 mark
|- NZD/USD witnessed some aggressive selling during the early North American session on Friday.
- The sharp slide took along some intraday trading stops near the 0.6650-45 confluence support.
- Bears might now aim to test the 0.6575 region (weekly lows) amid mounting US-China tensions.
The NZD/USD pair tumbled to fresh session lows, around the 0.6600 mark on reports that the US administration is considering imposing personal sanctions on Hong Kong leader Carrie Lam.
This comes after the US President Donald Trump signed executive orders banning transactions with popular Chinese apps – Tencent's WeChat and ByteDance's Tiktok. This, in turn, fueled worries about a further escalation of tensions between the world's two largest economies and boosted the US dollar's status as the global reserve currency.
Meanwhile, the latest leg of a steep fall over the past hour or so could further be attributed to some technical selling below the 0.6645 confluence support. The mentioned region comprised of 200-hour SMA and the lower boundary of weekly ascending trend-channel. A convincing breakthrough was seen as a key trigger for bearish traders.
Meanwhile, technical indicators on the 4-hourly chart have just started drifting into the bearish territory and support prospects for further weakness. However, RSI (14) on the 1-hourly chart is already pointing to slightly oversold conditions. This coupled positive oscillators on the daily chart warrant some caution for bearish traders.
That said, the pair still seems vulnerable to slide back to test weekly lows support, around the 0.6575 region. Some follow-through selling now seems to accelerate the fall further towards the 0.6525 intermediate support en-route the key 0.6500 psychological mark.
On the flip side, any meaningful recovery attempt might still be seen as an opportunity to initiate some fresh bearish positions and seems more likely to remain capped near the 0.6650-45 confluence support breakpoint.
NZD/USD 1-hourly chart
Technical levels to watch
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