NZD/USD Technical Analysis: Pennant breakdown has put bears in a commanding position

• The downside break of the narrowing price range or the pennant breakdown seen in the NZD/USD daily chart indicates a resumption of the sell-off from the June 6 high of 0.7060.
• The 14-day relative strength index (RSI) is biased to the bears. The 5-day and 10-day moving averages (MAs) are trending south, indicating a short-term bearish setup.
• And last but not the least, the path of least resistance is to the downside as the long-term MAs indicate (50-day, 100-day, and 200-day MA) are positioned one below the other.
• As a result, the spot could soon find itself in deep waters below the recent low 0.6688.

Daily chart

Spot Rate: 0.6728

Daily High: 0.6735

Daily Low: 0.6725

Trend: Bearish

Resistance

R1: 0.6757 (5-day moving average)

R2: 0.6778 (10-day moving average)

R3: 0.6794 (200-candle moving average on 4-hour chart)

Support

S1: 0.6720 (Aug. 3 low)

S2: 0.6688 (July 3 low)

S3: 0.6675 (May 2016 low)