NZD/USD traded near the 0.5700 mark, continuing its decline for a second consecutive day. The 20-day Simple Moving Average (SMA) at 0.5960 represents a critical support level, as a drop below this could lead to increased selling pressure.
The pair’s recent performance shows a struggle for buyers to maintain the 20-day SMA. Should this support fail, further losses could emerge, particularly with immediate support at 0.5650 and stronger support at 0.5600.
Technical Indicators And Market Outlook
Technical indicators reveal a bearish tendency, with the Relative Strength Index (RSI) declining and the 100-day SMA nearing a bearish crossover with the 20-day SMA. Resistance is noted at 0.5750, with a significant barrier at 0.5800.
The current market trend suggests a decline in buying interest, evident in the continued drop towards the 0.5700 level. With this movement extending into the second day, we see traders struggling to hold the price above the 20-day SMA, which currently hovers around 0.5960. A breach below this moving average would likely invite further selling, pushing the price lower. The next notable defence stands at 0.5650, followed by a more reinforced level at 0.5600.
From a technical perspective, conditions lean towards sellers maintaining control. The RSI continues to weaken, pointing to fading momentum on the upside. Additionally, the 100-day SMA is on the verge of overtaking the 20-day SMA in a bearish formation—historically a sign that selling may persist in the coming sessions. Should price action attempt an upward correction, resistance around 0.5750 could prove challenging for buyers, while a stronger barrier remains firm near 0.5800.
Trading Strategies And Key Considerations
For traders handling derivatives based on this market, it becomes increasingly important to observe whether price holds above 0.5700 or slips below it. If momentum favours sellers, strategies centred around further downside movement might prove more effective. However, if resistance levels are tested and breached, adjustments may be required.
