After finding good resistance near the 0.6658 zone during the first trading days of October, NZD/USD drifted lower. We can now draw a short-term tentative downside resistance line taken from the high of September 18th. The rate is now near one of its key support areas between the 0.6568 and 0.6575 levels, marked by the lows of September 30th and October 7th respectively. Although there is a good chance to see some further declines, we would prefer to see a drop below that area first, before aiming lower.
If, eventually, the pair does make a move below the aforementioned support area, that would confirm a forthcoming lower low and might clear the path towards lower levels. NZD/USD could then travel towards the low of September 28th, at 0.6540, a break of which may open the door for test of the 0.6511 hurdle. That hurdle marks the lowest point of September.
The RSI and the RSI and the MACD are both pointing a bit lower. In addition to that, the RSI is below 50 and the MACD is below both, its zero and trigger lines. The two oscillators show increasing downside price momentum, which may support the above-mentioned scenario.
Alternatively, if NZD/USD is somehow able to break the previously-discussed downside line, that could make the bears worry. The bears might get spooked from the field for a while if the rate rises above the current highest point of October, at 0.6658. Such a move would confirm a forthcoming higher high, increasing the pair’s chances of drifting further north. The rate may accelerate towards the 0.6687 obstacle, a break of which might clear the way towards the 0.6711 area. That area marks the intraday swing lows of September 16th and 17th.
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