NZD/USD eases following strong bearish rally; broader medium-term trend negative.
NZD/USD stalled its decline after a strong bearish rally over the previous two weeks. The pair is still trading below the 20- and 40-simple moving averages in the 4-hour chart but it has rebounded somewhat from the more than four-month low of 0.6985 hit earlier on Thursday.
The RSI has flattened below the 50 level, indicating that the market could be neutral in the short-term. However, the MACD oscillator supports a bullish picture, having moved above its red-trigger line.
Should the pair manage to strengthen its upward movement and jump above the moving averages at 0.7023 and 0.7048, the next resistance could come around 0.7095. A break above this level would shift the bias to a more bullish one and open the way towards the 0.7140 barrier, which overlaps with the 38.2% Fibonacci retracement level of the down-leg from 0.7395 to 0.6895.
An alternative scenario is a resumption of the bearish structure and a retest of the previous multi-month low of 0.6985. A break below the aforementioned level could open the way towards the 0.6950 support, identified by the low on December 2017.
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