The New Zealand Dollar versus the U.S. Dollar has spent most of 2021 rangebound between 0.6950 and 0.7300. As shown on the weekly chart below, the low of this range has been tested repeatedly and could be about to break.
On the daily timeframe below, the support level can be more clearly seen, and price has recently broken below the horizontal level, forming a lower low in price action. The 10, 20, 50 and 200 period moving averages (M.A.) have recently come into alignment in the correct order, pointing downward in the direction of the potential new downtrend and fanning out. This price action suggests the possibility of a downtrend continuing, which could lead to possible short swing trading opportunities.
A potential signal for the next move down would be based on how the current daily candlestick stick closes following the pullback into the declining 10 and 20 MAs. If it remains as a small bearish candlestick, then that could signal the extent of the rally.
The next major level of support is around the 0.6750 level, which coincides with the 100% Fibonacci extension of the recent move, could be a potential target for any short trades.
Alternatively, if this week's candlestick remains roughly at the current levels, then this could be a potentially bullish sign. The wicks of the last 2 weeks have broken through and immediately rejected the lows. Price rejecting the break of the 0.6950 level could signal a move back towards 0.7200 and beyond.