NZDUSD touched a three-week low of 0.6957 today as it continues to drift lower after finding resistance just above the 38.2% Fibonacci retracement level of the February-March downleg from 0.7375 to 0.6889. Prices have since slipped below the 23.6% Fibonacci level at the 0.70 handle as the negative momentum has deepened, with the stochastics just crossing into oversold levels. The RSI is not as bearish but still below 50, suggesting further losses are likely in the near term.
If prices continue to fall, the 0.6950 area could act as support before revisiting the 2-month low of 0.6889 set on March 9. A breach of this trough would take prices within 28 pips of December’s 6-month low of 0.6861, which if broken, could signal the start of a longer-term downtrend as it would form the fourth lower low since the 2016 peak of 0.7484. For now though, the neutral outlook for the medium term is holding.
On the upside, the nearest resistance to watch for is the 23.6% Fibonacci level at 0.70. Further up, the 38.2% Fibonacci level at 0.7075 could once again provide resistance. However, without a stronger uptrend that would lead prices to the 50-day moving average, currently at 0.71, the downside bias will persist.
Origin: XM
