NZD/USD technical analysis: 3-week old descending trend-channel lends some support, at least for now
- The NZD/USD pair extended overnight rejection slide from the 0.6400 handle and remained under some selling pressure for the second consecutive session on Wednesday.
- The pair dropped a four-year low level of 0.6326 in the last hour, albeit managed to find some support near the lower end of a three-week-old descending trend-channel.
Extremely oversold conditions on the daily chart, with RSI holding well below the 30 mark, seemed to be the only factor that helped limit deeper losses amid improving risk sentiment, which tends to benefit perceived riskier currencies – like the Kiwi.
However, the fact that the pair has already found acceptance below the 0.6365 horizontal support and has repeatedly faced rejection near the 0.6400 handle, the set-up remains tilted in favour of bearish traders and support prospects for further decline.
Hence, any attempted recovery move might confront some fresh supply near the mentioned support breakpoint, now turned resistance, above which bulls are likely to make a fresh attempt back towards conquering the 0.6400 round figure mark.
On the flip side, bearish traders are likely to wait for a sustained breakthrough the trend-channel support, below which the pair is likely to slide below the 0.6300 handle and head towards testing 2015 swing lows – around the 0.6230-20 region.
NZD/USD 4-hourly chart
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Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
