NZD/USD traded lower after it hit resistance near the key obstacle of 0.6720, which acted as the lower boundary of the sideways range that contained the price action from the 3rd of July until the 8th of August. That said, the slide was stopped by the 0.6665 barrier and then, the rate rebounded somewhat. Given that the pair failed to enter back within the range and stayed below its lower bound, we would expect the latest slide to continue a bit more.
We would expect a clear and decisive dip below 0.6665 to initially aim for our next support, at 0.6640, marked by the inside swing peak of the 20th of August. If the bears prove strong enough to break that barrier as well, then we may see further declines, perhaps towards the low of that day, at around 0.6610.
The RSI slid after it exited its above-70 zone, to break below its respective upside support line, while the MACD, even though within its positive territory, lies below its trigger line and points down. Although both these indicators are still within their bullish territories, they suggest that the latest recovery has run out of steam and support our view for further declines.
Alternatively, a clear move above 0.6720 would bring the rate back within the aforementioned range and could pave the way for the 0.6760 barrier, which proved a strong resistance zone from the 3rd until the 8th of August. That said, if that level fails to stop the pair this time, then we could see extensions towards 0.6785.
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