NZD/USD Price Analysis: Oversold RSI prods Kiwi bears around mid-0.6000s ahead of China PMI
|- NZD/USD clings to mild losses at the lowest levels in three weeks.
- Oversold RSI suggests limited downside room, highlights five-week-old horizontal support.
- 0.6155 appears short-term key hurdle but Kiwi bulls need to remain cautious below 0.6310.
NZD/USD traders lick their wounds at the lowest levels in three weeks while making rounds to the 0.6050-60 area amid Friday’s mid-Asian session. In doing so, the Kiwi pair drops for the third consecutive day but lacks downside momentum of late.
That said, the oversold RSI (14) line prods the NZD/USD bears of late. Also challenging the sellers is the receding bearish bias of the MACD signals.
It should be noted, however, that the Kiwi pair’s sustained downside break of the monthly support line, 100-SMA and a two-week-old bearish channel keeps the sellers hopeful.
Hence, a horizontal area comprising multiple levels marked since late May, around 0.6030, can allow the NZD/USD prices to consolidate before marking the fresh leg towards the south.
In that case, the 0.6000 round figure and the yearly low marked in May around 0.5985 will be in the spotlight.
On the contrary, the bottom line of the fortnight-old bearish channel, around the 0.6100 threshold, restricts the immediate recovery of the NZD/USD pair.
Following that, a convergence of the 100-SMA and the previous support line from May 31, close to 0.6155-60, could challenge the Kiwi pair buyers.
Even if the NZD/USD bulls dominate past 0.6160, the top line of the stated channel and the late May swing high, respectively near 0.6185 and 0.6310 will act as extra checks for the buyers.
NZD/USD: Four-hour chart
Trend: Limited downside expected
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