- NZDUSD has been trading sideways for more than a year
- Bears try to push below the key support of 0.5855
- RSI and MACD detect bearish momentum
- For the outlook to brighten, a move above 0.6220 may be needed
NZDUSD has been falling since September 30, when it hit resistance near the 0.6370 zone, which stopped the bulls back in December 2023 as well. Overall, though, most of the price action had been contained between the 0.5855 and 0.6220 zones since July 2023, suggesting a neutral broader outlook.
That said, today, the bears seem willing to push the battle below the 0.5855 territory, a move that may pave the way towards the low of October 26, 2023, at around 0.5770. If they are not willing to surrender there, they may then decide to dive all the way down to the 0.5600 barrier, marked by the low of October 21, 2022.
Both the RSI and the MACD detect negative momentum. The former is lying near its 30 line, while the latter has been running below both its zero and trigger lines since last Tuesday. Nonetheless, the RSI has been repeatedly respecting its 30 line as support, which raises the likelihood for a potential rebound before the next leg south.
If the recovery extends above 0.6035 though, this may be a sign that traders do not want to exit the range yet. The bulls may gain enough confidence to target the 0.6120 zone, the break of which could carry extensions towards the upper end of the aforementioned range at 0.6220. That said, for the picture to become brighter, a break higher may be needed.
To sum up, NZDUSD has been trading in a trendless mode for more than a year, but the bears are now attempting to break lower. It will be interesting to see whether a move below 0.5855 will lead to larger declines.