The NZD/USD pair remained subdued on Tuesday, trading around 0.5650 during the European hours for the second consecutive day. Technical analysis of the daily chart highlights a growing bearish bias, with the pair hovering near the lower boundary of a descending channel.
The 14-day Relative Strength Index (RSI) remains below the 30 level, signaling oversold conditions that could prompt a corrective bounce. However, if the RSI continues to hover near 30, it may reinforce the bearish sentiment, suggesting further downside risk.
Additionally, the NZD/USD pair is trading below both the nine- and 14-day Exponential Moving Averages (EMAs), reflecting weak short-term momentum and pointing to the likelihood of continued downward pressure.
In terms of support, the pair is nearing the lower boundary of the descending channel around 0.5630, with further support at the 26-month low of 0.5607, which was recorded on December 19. A decisive break below this key region could intensify bearish sentiment, pushing the pair toward the multi-year low of 0.5518, last seen in October 2022.
On the upside, the NZD/USD pair may face initial resistance at the nine-day EMA, located at 0.5708, followed by the 14-day EMA at 0.5743. A breakout above this resistance could shift short-term momentum, providing the potential for a test of the descending channel’s upper boundary at the 0.5800 level.
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