NZD/USD technical analysis: bearish target finally achieved
NZD/USD technical analysis shows that bullish MACD price divergence has been created during the recent decline towards the 0.6200 level. Watch out for a coming rebound towards the 0.6500 level if bulls can gain momentum above the 0.6290 level.
The New Zealand dollar fell to its weakest level against the US dollar since August 2015 as fears about the New Zealand economy and further cuts from the Reserve Bank of New Zealand caused the kiwi to plunge.
NZD/USD analysis indicates that the pair could start to rebound back towards the 0.6500 level now that the medium-term downside target has been achieved.
NZD/USD medium-term price trend
I previously noted that a large head-and-shoulders pattern had been triggered and that sellers would likely target the 0.6200 level before a recovery may take hold.
This scenario unfolded last week, and the NZD/USD is starting to stage a recovery above the 0.6300 level after meeting its medium-term bearish objective.
NZD/USD technical analysis shows that the pair could start to target towards the 0.6600 resistance level as long as the 0.6200 level remains defended.
The daily time frame shows that a bullish double-bottom pattern may be forming, after sellers failed to break below the August 2015 low, just above the 0.6000 level.
Overall, watch out for an upcoming rally back towards the NZD/USD pair 200-day moving average, around the 0.6500 level.
NZD/USD short-term price trend
NZD/USD technical analysis shows that the pair has a bearish short-term bias while trading below its key 200-period moving average on the four-hour time frame, around the 0.6430 level.
Bullish MACD price divergence has been created on the lower time frames, and suggests that the NZD/USD pair could correct back towards the 0.6500 level.
The one-hour time frame shows that the NZD/USD pair has the potential to recover higher while trading above the 0.6290 support level.
The 0.6290 level has a cluster of key short-term moving averages that buyers need to maintain price above in order to encourage technical buying towards the key near-term bullish targets, at 0.6430 and 0.6500.
NZD/USD technical summary
NZD/USD analysis shows that the pair is likely to test towards the 0.6500 to 0.6600 technical region now that the medium-term downside target has been achieved.