The NZD/USD pair is currently trading around the $0.5840 level, with the downtrend dominating the overall performance of the New Zealand currency against the US dollar. The New Zealand currency was affected by weak local economic data and the increasing attractiveness of the US dollar as a safe haven, especially with the escalation of expectations regarding the continuation of the monetary tightening policy by the Federal Reserve. This divergence in economic policies increases the selling pressure on the New Zealand currency.
NZD/USD Technical Analysis: Technical Indicators Analysis
- Moving Averages:
Continuous trading below the main moving averages, such as the 50- and 200-day moving averages, indicates strong selling momentum. These averages act as dynamic resistance levels that limit any attempts at price rebound, confirming the dominance of sellers in the market.
- MACD Indicator:
The indicator shows clear negative signals, as it stabilizes below the zero line, with an increase in the gap between the signal line and the indicator line. This indicates the continuation of the selling force and the absence of imminent reversal signals, which supports the continuation of the downtrend.
MACD Impact Analysis in the Future
- Strong Trend: If the MACD shows clear signals such as a bullish or bearish crossover with the gap between the lines widening, the current trend is likely to continue for a longer period.
- Oscillation or Reversal: The convergence of the MACD and signal lines with a narrowing gap usually indicates weak momentum and a possible trend reversal.
- Confirmation with Other Indicators: Despite its strength, it is best to use the MACD with other indicators such as the RSI or moving averages to get a more accurate picture of the future trend.
Trading strategies based on Buy/Sell levels
| NZDUSD | In case of buying | in case of selling |
| Entry point | 0.5855 | 0.2825 |
| Target Point 1 (TP1) | First resistance: 0.5885 | First support: 0.5795 |
| Target Point 2 (TP2) | Second resistance: 0.6915 | Second support: 0.5765 |
| Stop Loss (SL) | 0.5825 | 0.5885 |
The NZD/USD pair continues its downward trend supported by strong negative momentum, as confirmed by technical indicators. Investors are advised to monitor key technical levels and any relevant economic developments
especially those related to the New Zealand and US economies, to make informed trading decisions. The downtrend remains in control unless the price manages to break through key resistance levels and confirm a reversal.
MACD is a valuable tool for future forecasting, as it helps in analyzing momentum and identifying reversal or trend continuation points. However, it should be used with caution, and avoid relying on it alone to ensure more informed trading decisions.
