NZD/USD Pulls back as Selling Pressure Subsides at a Discount

NZDUSD Analysis: Market Begins Pullback As Selling Momentum Fades Out At Discount

NZDUSD pulls back as selling momentum dives into the discount zone. The buy-side liquidity sweep above $0.63850 preceded this crash. As indicated by the MA Cross, the direction of the market is bearish. However, a pullback to the upside is likely since the price has become oversold according to the RSI (Relative Strength Index).

NZDUSD Significant Zones
Demand Zones: $0.58140, $0.55120
Supply Zones: $0.59850, $0.65380

The formation of the major high at $0.65380 marked the beginning of the overall downward trend. Following an aggressive decline as a result of the selling pressure met at the premium, NZDUSD formed lower lows. The downtrend in fractals ended on March 7, 2023, after which a pullback ensued. The pullback brought the price back into the premium zone as it formed a swing high at $0.63850. According to the RSI indicator, the market did not enter an overbought state until the $0.63850 level was breached.

NZDUSD declined aggressively from the $0.63850 high into the $0.59850 demand zone. The buying pressure brought the price algorithmically from the $0.59850 demand zone to the upside during another pullback. After the buy-side liquidity sweep, the market’s overall trend resumed. The downtrend continued with increased momentum as prices crashed into the discount zone. According to the RSI indicator, until recently, NZDUSD had not reached the oversold state in the past six months. At the discount zone, NZDUSD is currently experiencing a decrease in selling momentum as it shows signs of bullish expansion.

Market Expectation

On the four-hour chart, the RSI forms higher lows against the price’s lower low. The divergence in the lows of the RSI indicator and the price chart indicates that NZDUSD is likely to experience an upward trend.