NZDUSD Bears Dominate as Price Declines Within Descending Channel

NZDUSD Analysis: Price Declines Within A Descending Channel As The Bears Remain Dominant

NZDUSD declines within a descending channel as the bears remain dominant. Price reversed to the downside following the inverted hammer that formed at 0.65380. The market flipped bearish according to the Moving Average. This brought about more bearish pressure as the bears seized market control.

NZDUSD Significant Zones
Demand Zones: 0.59850, 0.55120
Supply Zones: 0.65380, 0.70340

On January 6, 2023, after an expansion to the upside, NZDUSD made a short-term retracement and created a swing low at 0.61910. This marked the last swing low into the premium zone at the 0.65380 price level. At the premium zone, the price reversed as an inverted hammer candlestick formed. Before the downtrend that ensued afterward, the price consolidated, but only for a short time. At the creation of the swing high, the downtrend began its course as the bears seized control of the market.

The downtrend is currently continuing within a descending channel in the NZDUSD market. After the low at 0.61910 was invalidated, a new swing low was formed at 0.60840. During the creation of this swing low, NZDUSD experienced a hesitant upward expansion. This expansion lasted until it reached a lower high, lower than the previous swing high of 0.65380. The bears regained control as the market touched the diagonal resistance of the downward channel. According to the Stochastic Oscillator, NZDUSD is moving out of the oversold region. There is the possibility of further upward retracement until the diagonal resistance is reached.

Market Expectation

From the four-hour Fair Value Gap in the discount zone, NZDUSD made an aggressive rally. The aggressive rally resulted in the recent invalidation of weak diagonal resistance. However, once the previous high of 0.62460 is broken, the bears might return to the market.