NZD / USD Price Analysis: Falls to new weekly lows below 0.6600 level

• A strong pickup in USD demand puts heavy pressure on the NZD / USD.
• A sustained break below the 200 hourly SMA has been considered a key trigger for bears.
• The pair now looks vulnerable to retesting the monthly lows, around 0.6550.

The NZD / USD pair witnessed strong selling on Thursday and extended the pullback from the three-week highs hit in the previous session. A sustained break below the 200 hour SMA has been considered a key trigger for intraday bears and is behind the sudden decline during the European session, again below the 0.6600 level.

Meanwhile, technical indicators have again started to gain bearish traction on the daily chart, supporting prospects for further weakness amid a strong rally in demand for the US dollar. However, the oscillators on the 1 hour chart already show oversold conditions and warrant some caution before opening new bearish positions.

That being said, the pair still looks vulnerable to extend the move lower towards a retest of the support from monthly lows, around the 0.6550-45 region. The downtrend could extend further to challenge the key psychological level 0.6500, which if decisively broken should pave the way for a further short-term bearish move.

On the other hand, any recovery attempt could now be seen as a selling opportunity. This, in turn, should limit the rise near the break point of the support of the 200 hourly SMA, around the 0.6630 region. However, a sustained move above that region could trigger a short hedging move and lift the NZD / USD pair towards the 0.6660 resistance zone.

NZD / USD 1 hour chart