- NZD/USD hovers near 50-day SMA for the fifth straight trading day.
- Risks are skewed to the downside with the daily chart leaning bearish.
NZD/USD is trading near 0.6558 at press time, having defended the 50-day simple moving average (SMA) support at 0.6548 a few minutes ago.
Sellers failed to establish a foothold below the key SMA for the fourth straight trading day on Monday. As such, one may expect a technical bounce. Technicals, however, suggests otherwise.
To start with, the daily chart shows the pair has dived out of a five-month ascending trendline. The breakdown is backed by a below-50 or bearish reading on the 14-day relative strength index. In addition, the 5- and 10-day SMAs are trending south, indicating a bearish setup.
As such, a deeper drop toward the 200-day SMA at 0.6324 looks likely. A daily close above 0.66 – the high of the Doji candle created on Aug. 12 – is needed to invalidate the bearish setup.
Daily chart
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Trend: Bearish
Technical levels
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