Home NZD/USD Price Analysis: Seems vulnerable near 1-1/2 week low, just below mid-0.7000s
FXStreet News

NZD/USD Price Analysis: Seems vulnerable near 1-1/2 week low, just below mid-0.7000s

  • NZD/USD witnessed heavy selling on Monday and broke below the 0.7100 confluence support.
  • A subsequent fall below the 0.7060-55 might have shifted the bias in favour of bearish traders.
  • Oversold RSI on the 1-hourly chart warrants some caution before placing aggressive bearish bets.

The NZD/USD pair opened with a weekly bearish gap around the 0.7110-05 region and continued losing ground through the early European session on Monday. A sustained break below the lower boundary of a near two-week-old ascending channel was seen as a key trigger for bearish traders and aggravated the intraday selling pressure.

The imposition of tougher COVID-19 restrictions in the UK to contain the fast-spreading new variant of coronavirus and a deadlock in post-Brexit trade talks took its toll on the global risk sentiment. This, in turn, provided a strong boost to the safe-haven USD and drove some heavy flows away from the perceived riskier kiwi.

Meanwhile, the trend-channel support coincided with 200-hour SMA and subsequent break below 0.7060-55 horizontal zone might have already set the stage for additional losses. The NZD/USD pair now seems vulnerable to extend the sharp corrective fall from over two-and-half-year tops and slide further to the key 0.7000 psychological mark.

Technical indicators on the 4-hourly chart have just started drifting into the negative territory and losing positive momentum on the daily chart, adding credence to the negative outlook. That said, RSI on the 1-hourly chart is already flashing extremely oversold conditions and warrants some caution for aggressive bearish traders.

On the flip side, the 0.7095-0.7100 confluence support breakpoint now seems to capped any meaningful recovery attempt. Hence, a move back towards the mentioned support-turned-resistance might be seen as a selling opportunity and runs the risk of fizzling out rather quickly.

NZD/USD 1-hourly chart

fxsoriginal

Technical levels to watch

 

FX Street

FX Street

FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions.