The NZD/USD pair continued to edge lower during the European session on Monday, nearing the 0.5650 level. Technical analysis suggests a prevailing bearish trend, with the pair trading within a descending channel pattern, signaling ongoing downward momentum.
The pair remains below both the nine- and 14-day Exponential Moving Averages (EMAs), indicating weak short-term price momentum and reinforcing expectations of continued selling pressure. Additionally, the 14-day Relative Strength Index (RSI) remains below the 30 threshold, signaling an oversold condition that may lead to a potential upward correction in the near future.
On the downside, the NZD/USD could test the lower boundary of the descending channel around the 0.5630 level, followed by the 26-month low of 0.5607 recorded on December 19.
On the upside, the pair may face initial resistance at the nine-day EMA around 0.5708, with further resistance at the 14-day EMA near 0.5743. A break above this level could signal improved short-term momentum, allowing the pair to test the upper boundary of the descending channel near the 0.5800 mark.
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