NZDUSD bears have regained momentum after rejecting 0.7240 to 0.7230 resistance level. NZDUSD broke below 0.7150 psychological support area. Will bears continue the bearish pressure further in the coming days? What are the charts and technical indicators are saying? Read on to find further insights into today’s NZD/USD Technical Analysis.
January 20, 2021, | AtoZ Markets – NZDUSD is currently trading around 0.7130 area and trying to recover upside. After breaking over 0.7230 to 0.7240 resistance level, the bull failed to sustain the bullish pressure further and moved down quite impulsively. As per the current price action, the price may face strong resistance at the dynamic level of 20 EMA on the daily chart in the days ahead.
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NZDUSD Broke Below as the Price Requires a Deep Retracement
NZDUSD is currently residing near 0.7130 area and trying to push higher. However, the price had a weekly bearish engulfing bar close below 0.7150 to 0.7140 area.
Image: NZDUSD 4 Hour Chart
According to the 4-hour chart, NZDUSD broke below and currently trading around 0.7130 area. As per the current price action, if the price pushes upside towards 0.7140 to 0.7150 area and rejects with an impulsive bearish candle, the bears may sustain the bearish pressure further towards 0.7070 to 0.7060 area in the coming days. Alternatively, if the price breaks above 0.7140 to 0.7150 resistance level with an impulsive bullish candle, the bulls may regain momentum and recover higher towards 0.7230 to 0.7240 area in the process.
In addition, the dynamic level of 20 EMA is currently residing above the price. It may work as strong resistance to push the price downward in the days ahead. Also, the RSI line is currently residing below the mid-level 50 and gradually sloping downside. It indicates that the bears may sustain the bearish pressure further in the coming days.
NZDUSD May Decline Towards November 2020’s Low
According to the daily chart, NZDUSD broke below and currently residing near 0.7130 area. As per the current scenario, if the price can have an impulsive bearish daily candle close below 0.7150 to 0.7140 area, the bears may continue the bearish pressure further towards 0.7020 to 0.7000 area as a first target. The second target will be 0.6820 to 0.6800 area if the price can break below 0.7020 to 0.7000 area in the coming days.
Image: NZDUSD Daily Chart
Furthermore, the dynamic level of 20 EMA is currently residing above the price. Along with the Kijun line and the Tenkan line. So, the dynamic level may act as strong resistance to push the price downside. Besides, the Kijun line and the Tenkan may work as a confluence of the dynamic level in the process.
To conclude, after an extended period of bullish momentum, the price requires a deep retracement before continuing the bullish trend. A daily close is required to identify the definite momentum in the days ahead.