NZDUSD Sinks to Oversold Levels

Market Analysis – December 30

NZDUSD has been entrenched in a bearish trend, marked by a significant breakout in November. The demand level at 0.58840 had previously been a stronghold, successfully withstanding multiple tests since November 2023. However, persistent selling pressure, reinforced by the Moving Average (period 9), eventually overcame this level, triggering a sharp decline.

NZDUSD Key Levels

• Demand Levels: 0.56100, 0.55100, 0.50000
• Supply Levels: 0.57740, 0.58840, 0.60710

NZDUSD Long-Term Trend: Bearish

Intense bearish momentum drove the steep drop from 0.57740 to 0.56100, momentarily stagnating the market at the 0.56100 level. This consolidation is evident in the formation of small, sideways candles. The Stochastic indicator now signals that the pair has reached oversold territory, suggesting a potential pullback could be on the horizon.

The recent price displacement left behind a wide Fair Value Gap (FVG) as the market plunged toward 0.56100. The current range-bound behavior at this level reflects a lack of momentum, but bears are expected to regain control soon. A continuation of the downtrend may result in a breach of the 0.56100 support, potentially driving prices toward the next demand zone at 0.55100.

NZDUSD Short-Term Trend: Bearish

The oversold Stochastic reading hints at a potential retracement. The prevailing bearish trend and the absence of significant bullish momentum suggest that any pullback may be temporary. For optimal trade entry, traders can leverage forex signals by targeting prices within the premium range of the last impulsive displacement to initiate short positions in the market.

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