- NZD/USD may initially find support near the 50-day EMA at 0.5830.
- The 14-day RSI remaining above the 50 level suggests a sustained bullish bias.
- A breakout above the nine-day EMA at 0.5946 could pave the way for the pair to re-enter the ascending channel.
The NZD/USD pair is extending its losses for the second consecutive trading session, currently trading in the vicinity of 0.5930 during Thursday’s European trading hours. A technical analysis of the daily chart reveals a potentially weakening bullish sentiment, evidenced by the pair’s movement further below the established ascending channel pattern. This technical formation is often monitored by traders as a gauge of potential trend reversals or continuations.
Furthermore, the NZD/USD pair’s current position below the nine-day Exponential Moving Average (EMA) indicates a softening of short-term price momentum. The nine-day EMA, currently acting as a dynamic resistance level, is closely watched by short-term traders. However, the 14-day Relative Strength Index (RSI) remains positioned above the 50 mark, suggesting that an underlying bullish bias is still present in the market. Should the 14-day RSI break decisively below the 50 level, it could serve as confirmation of a broader bearish shift in market sentiment. Traders often use the RSI to gauge the magnitude of recent price changes to evaluate overbought or oversold conditions in the market.
On the downside, the NZD/USD pair could encounter initial support around the 50-day EMA, currently situated at 0.5831, followed by the key psychological level of 0.5800. A decisive break below this crucial support zone could significantly weaken the medium-term price momentum, potentially exerting further downward pressure on the NZD/USD pair and opening the door to a test of the support level at 0.5485—a price point not observed since March 2020, during the initial stages of the global pandemic. Market participants will be closely watching upcoming economic data releases from both New Zealand and the United States, including inflation figures and employment reports, which could provide further catalysts for price movement in the NZD/USD pair.
