NZDUSD has been in a downside correction since the pullback from the three-and-a-half-year high of 0.7463, holding within the 20- and 40-day simple moving averages (SMAs).
Looking at the technical indicators, the RSI is pointing slightly higher in the negative zone, while the MACD is holding above its trigger line in the bearish territory. That said, the stochastic is heading north again after it posted a bullish crossover within the %K and %D lines.
Should the market extend losses, support could be met between the 23.6% Fibonacci retracement level of the upward wave from 0.5470 to 0.7463 at 0.6995 and the 0.6940 barrier. Slightly lower the 200-day SMA, which is currently at 0.6900 could be a crucial line to break, while a significant leg below this area could send prices towards the 0.6800 psychological number.
On the flip side, if the pair bounces up, immediate resistance could be met at the 0.7100 handle and the 40-day SMA at 0.7138. If the bulls retake control, 0.7268 and the multi-year high at 0.7463 could come under the spotlight.
In the bigger picture, the pair is bullish as long as it holds above the 200-day SMA. In case it violates this line, the bears could take the upper hand.
Origin: XM
