NZD/USD Price Analysis: Consolidation phase intensifies, bulls present battle
- The NZD/USD stabilizes near 20-day SMA as bears intensify their attempts to breach the20-day SMA.
- Despite spirited defenses, both bulls and bears are yet to make significant headway.
- Daily chart indicators underscore continued consolidation with a slight downward momentum.
The NZD/USD dipped to a low of 0.6115 before recovering and stabilizing at the 20-day Simple Moving Average (SMA) of 0.6140. Both bulls and bears seem locked in an intense tussle with attempts to breach the 0.6220 area and the 20-day SMA respectively proving unsuccessful. This is indicative of an ongoing consolidation phase in the aftermath of Mid-May's sharp increase which saw the pair rise by more than 1.30%.
In the daily chart, the Relative Strength Index (RSI) has switched momentum and is now pointing downwards, suggesting a slight decline in buying pressure. This downward shift in the RSI is consistent with the flat red bars in the Moving Average Convergence Divergence (MACD), which further corroborates the consolidation narrative.
NZD/USD daily chart
The NZD/USD's immediate support is now at the 20-day SMA of 0.6140, with the 100 and 200-day SMAs converging in the 0.6050-0.6060 region and providing a strong support base for the pair. This could potentially serve as an anchor for correction if bears begin to take control. Any movements below this point of convergence may potentially signal sell conditions.
On the upside, the 0.6200 is the main resistance which in case of being breached, could be considered a buy signal.
Author
Patricio Martín
FXStreet
Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.
