Looking at the short-term picture, NZD/USD is still trading below its downside resistance line drawn from the 13th of April. The pair is currently testing the important area of support at around 0.6780, marked by the low of the 17th of November last year and the 2nd of June 2016. The sentiment is more to the downside and we could eventually see another slide lower.
As mentioned above, the 0.6780 is a very strong level of support, which if clearly broken could send NZD/USD to the lows that were last seen in the beginning of 2016. The next potential support zone to watch could be the area between 0.6705 and 0.6675. The latter is marked by the lows of 30th of May 2016. If the area is not able to withhold the rate from dropping lower, then we could aim for the 0.6575 level, which was the low of the 16th of March 2016.
That said, there is a possibility of a bounce before the pair reverses back down again. The first area of resistance to watch out for is the 0.6825 level. If this is not enough for NZD/USD, then it could go about 25 pips higher to reach the other good resistance hurdle at 0.6850, from which the pair could reverse back down.
The RSI is currently at the 24 mark and continues to point lower. Similar story with the MACD, where the indicator has moved well below the zero barrier without showing any signs for a potential reversal for now. It also continues to lie below its trigger line. At this point, both are pointing to some more weakness.
Alternatively, a break above the previously mentioned 0.6850 resistance level could interest some bulls to take NZD/USD a bit higher towards the 0.6920 zone. A break of that zone could push the pair slightly more to the upside to test the 0.6955 mark or even the aforementioned downside resistance line.
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