NZD/USD Price Analysis: Entering consolidation period after sharp losses in July
- NZD/USD made gains in Tuesday's session, rising to the 0.5900 mark.
- The pair seems to be entering a consolidation period guiding between the 0.5850 - 0.6000 channel.
- The daily RSI escapes the oversold territory, suggesting some cooling off from bearish momentum.
In Tuesday's trading session, the NZD/USD pair advanced upwards to 0.5900, marking a modest recovery of a 0.40% gain. This follows a bearish July, which saw the pair losing over 4% of its value. Traders had to navigate through a barrage of selling signals especially with the bearish crossover of the 20-day Simple Moving Average (SMA) at 0.6050 with the 100-day SMA last week. However, signs now suggest that the pair may be entering a consolidation period.
The daily Relative Strength Index (RSI) has now moved from oversold territory, signaling a potential easing of the selling pressure. Meanwhile, the Moving Average Convergence Divergence (MACD) continues to print flat red bars, underlining the overall bearish outlook, though indicating a possible moderation of the traction.
NZD/USD daily chart
The recently defined support zone is found within the 0.5850 - 0.5900 range, which also serves as a consolidation channel. Resistance is now at the former supports of 0.5950, 0.6000, and 0.6050. For the next sessions, if the buyers can hold their ground above this support area, they could prepare for a possible upward journey. Conversely, a move below this level could see the pair revert back to the bearish trend.
Author
Patricio Martín
FXStreet
Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.
