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Technical Analysis – NZDUSD downside risk below 0.7000

NZDUSD has retraced more than half of the gains it made from the rise from 0.6235 (September 23) to 0.6896 (October 15) on the daily chart. The bias turned increasingly bearish after prices broke below the 50% Fibonacci at 0.6565 and this level is now acting as resistance. The 61.8% Fibonacci is acting as support at 0.6487.

The tenkan-sen line crossed below the kijun-sen line, giving a bearish signal and the RSI is below 50, indicating momentum is to the downside. The market would need to move back above the key 0.7000 level and above the 200-day moving average to shift the bias. A move below the Ichimoku cloud would deepen the decline and see a retest of the 0.6235 low and 0.6139 low and would strengthen the downtrend that started from 0.7743.

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