GBPNZD Breaks Below Trendline, Turns Negative In Medium-Term

Technical analysis of Forex market

GBPNZD crossed below a medium-term uptrend line taken from the lows of June in recent sessions, and also below its 200-day simple moving average (SMA), recording a ten-month low yesterday. These suggest the medium-term outlook has turned firmly negative.

Short-term oscillators support this concept. The MACD lies both in negative territory and beneath its red trigger line. That said, the RSI is already in oversold territory, which may be a signal that a short-term rebound may be in store before the broader downtrend resumes.

Further declines in the pair could meet immediate support near 1.8650, the level that capped the plunge on November 15. If the bears pierce below it, then attention may turn to the October 2017 low of 1.8340, assuming the round figure of 1.8500 is violated first.

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On the upside, a recovery may stall initially around 1.8900, the June trough. An upside break could open the way for a test of 1.9060, a zone defined by the August lows, with even steeper advances eyeing the 1.9280 hurdle – this being the high of November 13. Higher still, the 200-day SMA at 1.9400 would attract attention.

Summarizing, the picture is decisively negative both in the short- and medium-terms, though the oversold RSI suggests a near-term rebound shouldn’t be ruled out.