The New Zealand dollar is losing upside momentum against the US dollar as the pair looks set to break its four-month winning streak.
NZD/USD analysis shows that a breakout under the 0.65 support level could cause heavy technical selling towards the pair.
NZD/USD medium-term price trend
The New Zealand dollar has suffered four straight weeks of losses against the US dollar, following the early-month rejection from the 0.67 level.
NZD/USD technical analysis shows that the pair is starting to test towards the bottom of a rising wedge pattern on the daily time frame.
Typically, rising wedge patterns are considered to be powerful bearish reversal patterns that have a high probability of success.
The daily time frame currently shows that the rising wedge pattern is located between the 0.65 and 0.6780 levels.
Traders should watch out for a potential decline towards the 0.64 area if a bearish breakout under the rising wedge pattern takes place.
Due to the overall uptrend, dip-buyers may be waiting for a pullback towards the 0.64 area in anticipation of further medium-term gains towards the 0.68 to 0.70 levels.
NZD/USD short-term price trend
NZD/USD technical analysis shows that the pair has a bearish short-term trading bias while the price trades below the 0.6580 support level.
The four-hour time frame currently shows that a bearish head and shoulders pattern is developing, following multiple upside rejections from the 0.67 and 0.66 areas.
According to technical analysis, the neckline of the bearish head and shoulders pattern is located around the 0.65 support level.
The size of the head and shoulders pattern indicates that the NZD/USD pair could fall towards the 0.63 level over the short-term.
Overall, watch out for a sharp decline in the NZD/USD pair if the 0.65 support level is overcome.
NZD/USD technical summary
NZD/USD analysis shows that a loss of the 0.65 level could cause the pair to fall towards the 0.64 level, and possibly even the 0.63 support level.
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