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Technical Analysis – NZDUSD falls to 5-year lows; outlook is bearish

NZDUSD was heading for a sixth straight day of losses, falling to a fresh five-year low of 0.6813. The pair has been moving downwards in the lower band of the Bollinger bands since it went into reverse at the end of April.

The outlook is decisively bearish with prices sharply below the 50-, 100- and 200- day moving averages. The next key support level will be the psychological 0.68 level. A break below this level would take it to new five-year lows.

RSI also continues to weaken and has fallen below 30 to oversold territory, which suggests NZDUSD may be due for a correction in the near term. Resistance is likely to come at the centerline of the Bollinger bands at 0.7054. However, the Bollinger bands have yet to signal a trend reversal so any upside momentum is likely to be short-lived.

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