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NZDUSD has been trending lower since March, generating a profound structure of lower highs and lower lows. Moreover, in the past few sessions, the technical picture has deteriorated even further, with the price recording a fresh 27-month low of 0.5995.
This negative near-term bias is also reflected by the short-term oscillators. The RSI is descending near the 30-oversold zone, while the MACD histogram is extending its retreat below both zero and its red signal line.
Should selling pressures intensify, the price could encounter support at the 27-month low of 0.5995. If that floor collapses, the pair will dive towards levels not seen in the past two years, where the May 2020 low of 0.5920 could provide downside protection. Failing to halt there, the April 2020 support of 0.5840 may halt any further drops.
To the upside, bullish actions could send the price to test the July low of 0.6060. Crossing above this region, the pair might ascend towards 0.6250 or higher to challenge the recent peak of 0.6467. Piercing through the latter, the June high of 0.6575 could prove to be a tough obstacle for the pair to overcome.
Overall, even if NZDUSD has come under tremendous downside pressure, the momentum indicators currently suggest that the pair has not yet reached oversold levels. Therefore, the price will most likely resume its decline into uncharted waters to fresh multi-year lows.
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