Drops below the confluence support of an uptrend line and the 100 hourly SMA

• The NZD / USD witnesses a profit taking on Thursday and moves away from the highs of almost two years.
• The bullish oscillators on the daily chart support the outlook for some lower buying to emerge.
• A sustained break below the 0.6800 level is needed to nullify the positive outlook for the pair.

The NZD / USD pair witnessed profit taking on Thursday and has fallen below the round level of 0.6900 during the first half of the European session.

The pair has now erased the positive move from the previous day, to the highest level since December 2018, and has retraced near the confluence support of 0.6885. The mentioned region comprises the 100 hourly SMA and a weekly uptrend line support.

A convincing breakout could lead to a further pullback and prolong the current corrective decline. The NZD / USD pair could then accelerate the decline towards the horizontal level of 0.6840 leading to the support zone of 0.6810-0.6800.

Meanwhile, the technical indicators on the one-hour chart have been gaining negative traction and support the prospects for a further decline. However, the oscillators on the daily chart are maintaining their bullish bias and have also moved away from the overbought territory.

Therefore, any significant drop below the aforementioned confluence support could still be seen as a buying opportunity and remain limited. The NZD / USD pair still appears poised to extend its bullish move and aim to regain the key psychological level of 0.7000.

With that said, a sustained break below the 0.6800 level will negate the bullish outlook and could trigger some short-term stop orders and set the stage for a further decline.

NZD / USD 1 hour chart