NZD/USD (a 4-hour chart)
The NZD strengthened on Friday following the US dollar broad weakness amid some profit taking from the sellers' part. However, the current recovery appeared to be limited as the kiwi remained under pressure amid the divergence between the Fed and RBNZ policy path.
Sellers continued to dominate on Friday. The NZD traded at multi month lows, maintaining a gloomy trend. The NZD/USD met a barrier at 0.7000 which rejected prices upwards. Buyers partly erased their losses when the price moved higher and approached the level 0.7050 post-Europe open. However, buyers failed to reclaim the level, the price just pierced the level and dropped back. The kiwi remained below the moving averages in the 4 hours chart. The 50-EMA crossed the 100 and 200 EMAs which accelerated their decline. The resistance is at 0.7050, the support can be found at 0.7000.
The indicators recovered from oversold levels, but remained within bearish territory. The MACD histogram decreased which indicates the sellers’ strength. RSI remained within oversold region.
If the bearish tone persists we expect a breakout of the level 0.7000 and an extension of the downward trajectory. After breaking the level sellers may extend their gains advancing towards 0.6950. An uptrend will start as soon, as the pair rises above the resistance level 0.7100. However, we stay bearish until then.