NZD/USD Price Analysis: Plunges below 61.8% Fibo retracement at 0.6720
22.04.2022, 03:34

NZD/USD Price Analysis: Plunges below 61.8% Fibo retracement at 0.6720

  • Failing to establish above 0.6800 has dragged the asset swiftly.
  • The 20- and 50-period EMAs have delivered a bear cross, which signals more weakness ahead.
  • The RSI (14) has slipped below 60.00, showing no sign of divergence and an overbought situation.

The NZD/USD pair is falling like a house of cards since Thursday after failing to sustain above the round level resistance of 0.6800.  The asset has eased more than 1.4% from its weekly high of 0.6814 and is expected to extend losses as it has slipped below the four-day low at 0.6715.

On the daily scale, NZD/USD pair has failed to sustain above 61.8% Fibonacci retracement (placed from January’s low at 0.6529 to April’s high at 0.7035) at 0.6724. Usually, a plunge below 61.8% Fibo retracement denotes sheer downside ahead.

A fresh bear cross of 20- and 50-period Exponential Moving Averages (EMAs) at 0.6825 signals a swift downside move going forward. Adding to that, the Relative Strength Index (RSI) (14) has dropped below 40.00, which indicates more weakness. The momentum oscillator RSI (14) is not displaying any sign of divergence and an oversold situation.

A test of the supply area in a 0.6719-0.6727 will be an optimal sell for the market participants. This will drag the asset towards February 22 low at 0.6682, followed by February 10 low at 0.6653.

On the contrary, kiwi bulls could regain strength if the asset oversteps the weekly high at 0.6814. Violation of the same will drive the asset towards the 38.2% Fibo retracement and April 12 high at 0.6843 and 0.6890 respectively.

NZD/USD daily chart

 

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