NZD/USD Price Analysis: Retreats towards 0.6100 inside monthly falling wedge
- NZD/USD remains pressured around six-week low marked on Monday.
- Falling wedge formation teases buyers to take a risk but RSI hints at further downside.
- Convergence of the 100-SMA and 200-SMA appears a tough nut to crack for bulls.
NZD/USD prints a three-day downtrend while posting mild losses around 0.6115 during Thursday’s Asian session. In doing so, the Kiwi pair stays near the lowest levels in 1.5 months, tested earlier in the week.
That said, the quote’s latest weakness could be linked to the U-turn from a three-week-old resistance line forming part of the falling wedge bullish chart pattern. The downside momentum also takes clues from the RSI (14).
Hence, the quote’s further weakness towards the weekly bottom of 0.6100 can’t be ruled out.
However, the stated wedge’s bottom and the yearly low marked in July, respectively around 0.6065 and 0.6060, could test the NZD/USD bears.
It should be noted that the RSI might have turned oversold around the yearly low, which in turn signals a corrective pullback, failing to portray the same could quickly drag the quote towards the 0.6000 psychological magnet.
On the contrary, an upside break of the 0.6145 hurdle will confirm the bullish chart pattern but the NZD/USD buyers will need validation from the 50-SMA level surrounding 0.6170.
Also acting as the key upside hurdle is the 100 and 200 SMA confluence, near 0.6260-55.
NZD/USD: Four-hour 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.
