NZDUSD Recovers a Tad but Bearish Pressures Weigh on the Pair

Technical analysis of Forex market

NZDUSD is improving above the red Tenkan-sen line at 0.6979 after a mixed US NFP payroll report was released. The simple moving averages (SMAs) and the Ichimoku lines continue to sponsor bearish demeanours; however, the negative slope of the 50-period SMA has somewhat turned horizontal, signalling that buyers are fighting back.

The short-term oscillators are indicating an aggressive pick up in positive momentum. The MACD, in the negative region, is climbing above its red trigger line, while the RSI is labouring to conquer the 50 level. The stochastic oscillator’s positive bearing remains intact, signalling buyers have yet to abate.

If buying interest intensifies, early upside constraints could transpire from the blue Kijun-sen line at 0.7005 until the 50-period SMA at 0.7019. Overcoming this nearby resistance zone, the price may then meet the Ichimoku cloud and 0.7050 high overhead, which is reinforced by the 100-period SMA. Recapturing the region above the cloud, the price may quickly target the 0.7085-0.7104 resistance border. From here, navigating past the 0.7100 handle, buyers may be encouraged to challenge the 200-period SMA at 0.7135 and the 0.7148-0.7160 neighbouring obstacle, being an area of highs from where the pair collapsed in mid-June.

If sellers manage to retake the reins and steer the price back down, initial friction could arise from the red Tenkan-sen line at 0.6979 ahead of the previous candle’s low of 0.6945. Not too far below is the near seven-month low of 0.6922. Should the pair dive past this vital trough, the bears could test the support zone of 0.6875-0.6896 formed between lows in April and September of 2020. Sinking further, bearish forces could steer the price towards the support band of 0.6794-0.6809.

Summarizing, NZDUSD is sustaining a neutral-to-bearish tone beneath the SMAs, the cloud and the 0.7050 high. The pair would need to return above the 0.7100 mark to dismiss near-term bearish forces.