NZD/USD Price Analysis: Plummets to over 6-week lows, around mid-0.6500s

The NZD/USD pair came under some intense selling pressure on Monday and tumbled to over six-week lows, around the 0.6555 region during the early North-American session.

Friday's rejection from the top end of monthly descending trend-channel was seen as a key trigger for bearish traders amid concerns over the outbreak of the deadly coronavirus.

The pair has now dropped closer to support marked by 38.2% Fibonacci level of the 0.6203-0.6756 positive move, which coincides with a near four-month-old ascending trend-line.

This is closely followed by another confluence region around the 0.6520-15 region – comprising of the trend-channel support and the very important 200-day SMA.

Sustained weakness below the latter might be seen as a fresh trigger for bearish traders and pave the way for an extension of the ongoing downtrend amid the prevailing risk-off mood.

Meanwhile, technical indicators on the daily chart have been gaining negative traction and are still far from being in the oversold territory, supporting prospects for further downside.

However, traders are likely to wait for a sustained break below the mentioned support before positioning for a slide towards testing levels below the key 0.6500 psychological mark.

On the flip side, any attempted recovery might now confront some fresh supply near the 0.6585 horizontal level and seems more likely to remain capped near the 0.6600 round-figure mark.

NZD/USD daily chart