NZD/USD Price Forecast: Tests nine-day EMA near 0.5700 with a consolidation phase

• NZD/USD could challenge the upper trendline of the rectangle at 0.5780, followed by the three-month high of 0.5794.
• The bearish rectangle pattern indicates a potential downward breakout after a consolidation phase.
• Immediate support is found at the nine-day EMA of 0.5705, aligned with the 50-day EMA at 0.5699.

NZD/USD pulls back from its gains over the past two sessions, trading near 0.5710 during European trading hours on Thursday. Technical analysis of the daily chart suggests a potential downward breakout following a consolidation phase, as the pair moves within a bearish rectangle pattern. This formation indicates that sellers maintain control, while buyers temporarily support the price within a defined range before the next decline.

The nine-day and 50-day Exponential Moving Average (EMA) align together, signaling a period of equilibrium in the market where short-term and medium-term trends are converging. However, the 9-day EMA breaks above the 50-day EMA, signaling a bullish momentum shift. Additionally, the 14-day Relative Strength Index (RSI) remains above the 50 mark, suggesting that bullish bias is in play.

On the upside, the NZD/USD pair may test the upper trendline of the rectangle at 0.5780, followed by the three-month high of 0.5794, reached on January 24. A decisive break above this key resistance zone could strengthen bullish momentum, potentially driving the pair toward the four-month high of 0.5922, recorded in December 2024.

The immediate support is located at the nine-day EMA of 0.5705, aligned with the 50-day EMA at 0.5699. A decisive break below these levels could weaken both short- and medium-term momentum, applying downward pressure on the NZD/USD pair. This could lead to a test of the psychological support at 0.5600, followed by the lower trendline of the rectangle near 0.5516--the lowest level since October 2022, recorded on February 3.

NZD/USD: Daily Chart