NZD/USD Price Analysis: Breach of 20-day SMA support opens door to further declines


content provided with permission by FXStreet


  • NZD/USD
    faced
    heav losses,
    breaching
    the
    previously
    held
    20-day
    SMA
    support,
    now
    resistance.

  • The
    technical
    outlook
    transitions
    towards
    a
    bearish
    sentiment,
    following
    Wednesday’s
    sharp
    decline.

  • Bears
    broke
    the
    20-day
    SMA
    and
    are
    eyeing
    the
    strong
    support
    formed
    by
    the
    convergence
    of
    the
    100
    and
    200-day
    SMAs
    near
    0.6070.

On
Wednesday,
the

NZD/USD

dropped,
losing
more
than
0.70%
to
0.6080,
obliterating
its
support
at
the
20-day
Simple
Moving
Average
(SMA),
which
was
regained
last
week
and
tainted
the

outlook

with
red.

As
for
the
daily
technical

indicators
,
the
Relative
Strength
Index
(RSI)
is
currently
at
43,
showing
a
downward
trajectory,
indicating
a
considerable
decrease
in
buying
momentum
compared
to
Tuesday’s
close
at
52.
The
Moving
Average
Convergence
Divergence
(MACD)
printed
a
fresh
red
bar,
suggesting
an
increasing
bearish
momentum.

NZD/USD
daily
chart

In
terms
of
resistance
for
bulls
to
recover,
the
immediate
challenge
lies
at
the
0.6115
level
(20-day
SMA)
now
turned
into
resistance,
and
then
at
0.6150.
A
decisive
close
above
these
levels
will
be
crucial
to
negate
the
recent
bearish
momentum
and
might
assist
bulls
in
making
a
fresh
attempt
to
reclaim
control.

On
the
downside,
immediate
support
is
near
the
crucial
convergence
of
100
and
200-day
SMAs
at
0.6070.
A
conclusive
break
below
this
level
could
affirm
the
negative
outlook,
triggering
a
deeper
corrective
slide
towards
0.6050
and
then
the
0.6030
support
levels.