NZD/USD: Another minor recovery before downtrend resumes on a break below 0.6589 – Credit Suisse

NZD/USD is undergoing another minor recovery following its decline from last week, which analysts at Credit Suisse anticipate will prove temporary. They still view the market as in a broader downtrend and would fade rallies like this one.

0.6701/10 to hold any further bounce

“With major resistance at the December 2021 lows at 0.6701/10 ideally serving as a ceiling for this upmove, we still look for NZD/USD to shift back lower again, with a closing break below 0.6601/6589 needed to reassert the downtrend and decrease the risk of further recoveries.”

“Below 0.6601/6589 would see scope for the YTD low at 0.6529 to be retested again, with break below here opening the door to our long-held objective at 0.6511/6488 – the August and September lows of 2020. 

“Immediate resistance is seen at 0.6662, then at 0.6681/92 and eventually at the aforementioned December 2021 lows at 0.6701/10.”

“A sustained closing break above 0.6701/10 and then the 55-day moving average at 0.6734/40 would instead suggest that a broader sideways phase would arise.”