NZDUSD Market Analysis- Bears Are Leading the Market Towards 0.6000
NZDUSD bears are leading the market towards a major demand zone. The daily timeframe on NZDUSD has been extremely bearish since the beginning of March 2021. The market descended through a creek for a few months as it keeps maintaining a trendline across its highs. The current bearish trend began early last month owing to the market’s regard for the support level 0.6570 which later turned to a major resistance level.
NZDUSD Major Zones
Resistance levels: 0.6570, 0.7210
Support levels: 0.5920, 0.5500
NZDUSD Long-Term trend: Bullish
Ever since early last year, the market has been noticeably bearish and this was first indicated by the overbought signal on the Relative Strength Index (RSI) and the shift in market structure (SMS). As the market continued with its downtrend, forming lower highs and lower lows – it broke across a significant support level. It was later retested to confirm that the level is still very significant and can be considered a major resistance level in the future. This support turned resistance is expected to lead the market towards the major demand zone.
One obvious behaviour of the market is its reaction towards the oversold regions of the Relative Strength Index (RSI). It appears that the market reacts every time the RSI gets to the oversold region by bouncing swiftly off the lower Bollinger Band. This bouncing has led to the forming of the lows of the market structure. As the market keeps respecting this oversold region and leading the market towards the major demand zone, it appears to be doing so in order to fill the Fair value Gap (FVG) that has been formed since May 2020.
NZDUSD Short-term trend: Bearish
On the four-hour chart, it appears the bears are still having their moment in the market as they are yet to offload their positions. Currently the candlesticks continues to whirl and move around the trendline and about the Bollinger Bands respectively. If the candlesticks refuse to break and retest the trendline on the four-hour timeframe, market might keep sinking down towards the demand zone.
As the market keeps sinking downward further, a change in trend is likely possible between the 0.6000 and 0.5920 demand zone.
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