NZD/USD technical analysis: Any subsequent recovery is likely to remain capped near 0.6300 handle
- Oversold conditions helped bounce off a descending trend-channel support.
- Set-up points to additional recovery, though seems likely to remain limited.
The NZD/USD pair gained some positive traction at the start of a new trading week and recovered a part of Friday's sharp intraday fall to fresh multi-year lows. Extremely oversold conditions on the 1-hourly chart helped the pair to rebound from a support marked by the lower end of a one-week-old descending trend-channel.
Meanwhile, oscillators on 4-hourly/daily charts maintained their bearish bias but remained on the verge of oversold territory, supporting prospects for further recovery. However, a goodish pickup in the USD demand and a fresh wave of global risk aversion trade might keep a lid on any runaway rally amid US-China trade pessimism.
Hence, any subsequent seems more likely to confront some heavy supply near the descending trend-channel resistance and remain capped around the 0.6300 handle.
On the flip side, the 0.6260-55 region now becomes immediate support to defend, which if broken now seems to pave the way for a further depreciating move in the near-term. Below the mentioned support, the pair is likely to accelerate the slide further towards August 2015 swing lows support near the 0.6220-15 region en-route the 0.6200 mark.
NZD/USD 1-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.
