· NZDUSD faces key support at 0.5700 after 2-month high
· Holds above short-term uptrend line
· But momentum oscillators suggest weakness
NZDUSD is retreating near the 0.5700 floor after climbing to a fresh two-month high of 0.5750 on Monday’s session, finding a strong resistance obstacle near the 23.6% Fibonacci retracement level of the downward wave from 0.6370 to 0.5740.
A few hours before the RBNZ decision, which is expected to cut by 50bps, the pair is losing some steam, confirmed by the technical oscillators. The RSI indicator is sloping down above the 50 territory, while the stochastic is ready for a bearish cross within its %K and %D lines in the overbought region.
If the support level at 0.5700 is broken, the focus will shift to the downside and the positive crossover between the 20- and 50-day simple moving averages (SMAs) at 0.5670. If this level is broken, the downside pressure will rise and hit the short-term rising trend line at 0.5610. From here, NZDUSD would be on the path to the 27-month low of 0.5740, which was also the lower boundary of the two-month trading range.
If price action remains above 0.5700, there is scope to test the 23.6% Fibonacci at 0.5740 again. Clearing this key level would see additional gains until the 0.5815 barrier and the 38.2% Fibonacci of 0.5860. Rising above them would see traders rallying to the 0.5920 mark and the 50.0% Fibonacci at 0.5960, which stands near the 200-day SMA.
Overall, NZUDSD has been in a somewhat positive phase since it broke through the medium-term descending trend line and is still above the short-term simple moving averages (SMAs). However, it is likely to lose value as long as the momentum oscillators show that they are overstretched.
· Holds above short-term uptrend line
· But momentum oscillators suggest weakness
NZDUSD is retreating near the 0.5700 floor after climbing to a fresh two-month high of 0.5750 on Monday’s session, finding a strong resistance obstacle near the 23.6% Fibonacci retracement level of the downward wave from 0.6370 to 0.5740.
A few hours before the RBNZ decision, which is expected to cut by 50bps, the pair is losing some steam, confirmed by the technical oscillators. The RSI indicator is sloping down above the 50 territory, while the stochastic is ready for a bearish cross within its %K and %D lines in the overbought region.
If the support level at 0.5700 is broken, the focus will shift to the downside and the positive crossover between the 20- and 50-day simple moving averages (SMAs) at 0.5670. If this level is broken, the downside pressure will rise and hit the short-term rising trend line at 0.5610. From here, NZDUSD would be on the path to the 27-month low of 0.5740, which was also the lower boundary of the two-month trading range.
If price action remains above 0.5700, there is scope to test the 23.6% Fibonacci at 0.5740 again. Clearing this key level would see additional gains until the 0.5815 barrier and the 38.2% Fibonacci of 0.5860. Rising above them would see traders rallying to the 0.5920 mark and the 50.0% Fibonacci at 0.5960, which stands near the 200-day SMA.
Overall, NZUDSD has been in a somewhat positive phase since it broke through the medium-term descending trend line and is still above the short-term simple moving averages (SMAs). However, it is likely to lose value as long as the momentum oscillators show that they are overstretched.