NZD/USD Price Analysis: Off lows by more than 250 pips

NZD/USD has recovered sharply from session lows.
The pair is still trading under the 2020 descending trendline.

Omkar Godbole FXStreet Contributor

The NZD/USD pair is currently trading near 0.6280, having hit a low of 0.6008 an hour ago.

The flash crash in USD/JPY seen during the sixty minutes to 02:00 GMT weighed heavily over the NZD, pushing the NZD/USD pair down to lows near 0.60. That level was last seen in May 2009. The AUD/USD pair also took a beating during that one hour and fell to an 11-year low of 0.6314.

However, despite the sharp recovery from session lows, it is still too early to call a bullish reversal in NZD/USD, as the pair is yet to take out the trendline falling from Dec. 31 and Jan. 24 highs.

A close above that hurdle would put the bulls into the driver's seat and could yield rise to 0.6480, where the 200-day average is currently located.

Should the bounce from session lows fade near 0.63, a fresh move lower toward 0.62 will likely be seen, as the risk-off tone in markets is showing no signs of weakening.

Daily chart

Trend: Bearish

Technical levels

1. R3 0.6472
2. R2 0.6422
3. R1 0.6391
PP 0.6341
1. S1 0.631
2. S2 0.626
3. S3 0.6229

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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