NZD/USD Price Analysis: Bears unleash on a downside break of Tweezer Bottom, 0.5500 eyed

• Bears have been infused with fresh blood as the kiwi bulls have failed to defend the Tweezer Bottom.
• The downside-sloping trendline from 0.5790 will continue to act as a major barricade ahead.
• The NZD/USD pair is expected to print a fresh 13-year low at around 0.5470.

The NZD/USD pair has displayed a minor pullback move after refreshing its two-year low at 0.5565 in the Tokyo session. The pullback move doesn’t stem from an accumulation base and is expected to conclude sooner, which will trigger further downside in the asset. In early Asia, the asset displayed a bearish open-drive session, which dragged the asset firmly.  

A downside break of a Tweezer Bottom candlestick pattern indicates a fresh downside impulsive wave. Usually, a Tweezer Bottom formation is considered a reversal pattern, however, the market participants have taken the pullback move as an opportunity to create more shorts, indicating that smart money is coming in the counter.

The downward-sloping trendline from May 12 low at 0.6217 will act as a major barricade for the counter. Also, the declining 10-period Exponential Moving Average (EMA) at 0.5790 is signaling more weakness ahead.

Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in the bearish range of 20.00-40.00, which signifies that the downside momentum is intact.

The kiwi bulls could lose display more weakness if the asset drops below Wednesday’s low at 0.5565. An occurrence of the same will drag the asset towards the psychological support and March 2020 low at 0.5500 and 0.5469 respectively.

On the flip side, a decisive break above Monday’s high at 0.5755 will send the asset towards the round-level resistance at 0.5800, followed by Friday’s high at 0.5888.

NZD/USD daily chart