- NZD/USD breaks 7-day downtrend near monthly low.
- Nearly oversold RSI appears to support rallying moves, but previous support in early May challenges the rebound.
- 20-DMA, the descending resistance line from April adds filters to the upside.
- Bearish MACD, break of key support favors sellers eyeing 61.8% FE.
NZD/USD is showing a corrective pullback around a 1-month low, breaking a seven-day downtrend, in Tuesday’s inactive Asian session. The kiwi pair refreshed the monthly low at 0.6246 before recently bouncing back to 0.6270.
The rallying moves appear to be pulling clues from the nearly oversold RSI (14) line. However, the pair remains below the previous horizontal support line from May 10, broken the previous day, which in turn joins the bearish MACD signal to keep the sellers hopeful.
Even if the price breaks the immediate hurdle of 0.6300, the 20-DMA near 0.6442 and a 2.5-month-old falling sloping resistance line near 0.6480 will be crucial for the return of the NZD/USD buyer.
The monthly high near 0.6580 also acts as an upside filter.
Alternatively, further declines could target the yearly low around 0.6215 and could again represent indecision near the 0.6200 level.
It should be noted that several lows marked in March and April 2020 could also challenge the NZD/USD at around 0.6150 before directing them towards the Fibonacci expansion (FE) of 61.8% of the movements from April to May. , close to 0.6070-65.
NZD/USD: daily chart
Trend: further weakness expected