NZD/USD Price Analysis: Further downside hinges on 0.6120 breakdown and US PMI
- NZD/USD prints the biggest daily loss in two weeks, so far.
- Convergence of 21-DMA, monthly ascending trend line restricts immediate downside.
- Risk-off mood exerts downside pressure on Kiwi pair ahead of preliminary US S&P Global PMIs for June.
NZD/USD takes offers to refresh intraday low around 0.6140 as it extends the previous day’s losses amid sour sentiment heading into Friday’s European session. In doing so, the Kiwi pair justifies the broad US Dollar strength ahead of the first readings of the US S&P Global PMIs for June.
Also read: NZD/USD drops to fresh daily low, around 0.6160 area amid renewed USD buying
Technically, the 14-day RSI returns to the normal territory surrounding the 50.00 round figure and suggests limited downside room, which in turn highlights a convergence of the 21-DMA and an upward-sloping trend line from May 31, close to 0.6120 at the latest.
That said, a 3.5-month-old horizontal support zone, around 0.6080, acts as an additional downside filter before directing the NZD/USD bears toward the yearly low of near 0.5985.
On the flip side, 38.2% and 50% Fibonacci retracement levels of the Kiwi pair’s February-May downturn, respectively near 0.6200 and 0.6265, restrict short-term advances of the quote.
Following that, a descending resistance line from early February and the 61.8% Fibonacci retracement, close to 0.6315 and 0.6330 in that order, will act as the final defense of the pair sellers.
NZD/USD: Daily chart
Trend: Limited downside expected
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
