NZDUSD Breaks $0.59850 Previous Low As Price Enters Oversold State

NZDUSD Analysis: Market Breaks the $0.59850 Previous Low As Price Enters Oversold State

NZDUSD breaks its previous low of $0.59850 as the price enters an oversold state. A bullish expansion is likely, as the Stochastic Oscillator indicates that the market is oversold. As the price returns to the premium zone, NZDUSD sellers might exit the market for a while. However, owing to the market’s structure, the downtrend will likely continue after the bullish retracement.

NZDUSD Significant Zones
Demand Zones: $0.59850, $0.57090
Supply Zones: $0.65380, $0.67290

The overall trend of the market is bearish. However, the market might experience a bullish retracement soon as the Stochastic Oscillator indicates that NZDUSD is oversold. Following the retest at the $0.65380 resistance, the market fell irresistibly to the downside. The unresistible decline continued until a Change Of Character (CHOCH) occurred. The market’s environment changed from a bullish one to a bearish one. Two lower lows followed the CHOCH until NZDUSD reached the $0.60840 price level.

A correction phase succeeded in the first phase of the downtrend in May 2023. The relatively equal highs at $0.63900 formed as NZDUSD struggled to extend beyond the price level. The price crashed afterward to break the market’s structure, leaving a liquidity pool above the $0.63900 high. A bullish retracement began following the bounce on the $0.59850 support as NZDUSD headed into external liquidity. The market’s trading range is currently lying between the $0.65380 resistance and the $0.59850 support. At the 79.0 retracement level, the market’s downtrend resumed.

Market Expectation

The market has been declining alongside the four-hour trendline since mid-July. According to the Stochastic Oscillator, the New Zealand dollar is now oversold. As NZDUSD enters the oversold state, the price expanding into the premium zone becomes highly probable.