- On Friday, the NZD/USD pair dropped sharply, settling around 0.5830.
- The pair is facing sturdy resistance at the 20-day SMA, which remains unbroken.
- Indicators point to weakening purchasing power, which reinforces the bearish outlook.
The NZD/USD pair extended its decline on Friday, falling to 0.5830 after failing to break above the 20-day uncomplicated moving average (SMA). This key technical level continues to act as a formidable resistance, preventing an upward rebound and leaving the pair under significant selling pressure.
Technical indicators reflect the loss of bullish momentum. The relative strength index (RSI) is on a downward trajectory, remaining in negative territory, signaling weakening purchasing traction. Meanwhile, the Moving Average Convergence Divergence (MACD) displays a contracting histogram with fading green bars, indicating a slowdown in bullish momentum and strengthening bearish sentiment.
For now, the outlook remains decidedly bearish, with the 20-day SMA providing a critical barrier to any upside attempts. If selling pressure continues, the pair could head towards further declines towards the psychological level of 0.5800. On the other hand, to change the dynamics in favor of the bulls, a decisive break above the 20-day SMA, currently near 0.5880, is necessary.
