NZD/USD has broken out of the bottom of a long-term range and despite reaching oversold extremes is tipped to go even lower.
NZD/USD breaks to fresh lows after breaking out of the bottom of a multi-month range. The pair is now oversold and could correct back in the near-term. Eventually NZD/USD is likely to continue its descent towards bearish price targets. The NZD/USD had been oscillating within a multi-month range stretching from a floor at about 0.6080 to a ceiling at roughly 0.6210. On Tuesday it decisively broke below the floor and took a step lower – a bearish sign for price.
Traders are advised not to add any more short-orders to their positions whilst the RSI is oversold and to close shorts when the indicator rises out of oversold. Despite warning signs of a correction the longer-term outlook remains bearish. The pair is in an established short-term downtrend, with progressively lower peaks and troughs in the price action, and given the old adage that “the trend being your friend,” this suggests more downside as probable.
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