- The NZD/USD pair extended this week’s rejection slide from the 0.6300 handle and remained under some heavy selling pressure for the third consecutive session on Thursday.
- The pair dropped to challenge the 0.6300 handle – the lowest level since September 2015 – and confirmed a bearish breakthrough a three-week-old descending trend-channel.
Against the backdrop of US-China trade pessimism, Thursday’s disappointing release of ANZ Business Confidence reaffirmed calls of a future RBNZ rate cut in November and kept exerting downward pressure on the major.
However, extremely oversold conditions on hourly/daily charts held investors from placing any fresh bearish and seemed to be the only factor that helped limit further losses, allowing the pair to rebound around 15-pips from daily lows.
Meanwhile, a follow-through weakness below the 0.6300 handle will now be seen as a key trigger for bearish traders and set the stage for an extension of the downward trajectory towards testing 2015 swing lows – around the 0.6230-20 region.
On the flip side, any attempted recovery move might now confront some fresh supply near the 0.6330-35 region, above which the pair is likely to aim towards testing the top end of the descending trend-channel – currently near the 0.6365-70 zone.
NZD/USD 4-hourly chart
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