NZD/USD risks further downside as Kiwi tests critical support at 0.6050

• NZD/USD consolidates within a symmetrical triangle on the 4-hour chart, reflecting short-term indecision.
• A rising wedge pattern on the daily chart signals a potential bearish breakout below 0.6038.
• Kiwi tests critical psychological support at 0.6050.

The New Zealand Dollar (NZD) is weakening against the US Dollar (USD) on Friday as market participants weigh near-term resistance against a weakening bullish structure.

At the time of writing, NZD/USD is trading around 0.6050, pulling back from the 0.6120 resistance level after failing to maintain recent highs.

The NZD/USD 4-hour chart displays a symmetrical triangle pattern formed by a series of lower highs and higher lows, with price action converging into a tightening range. 

This pattern typically indicates market indecision, with neither bulls nor bears in full control, and often precedes a breakout.

In this case, the triangle is forming just below the 78.6% Fibonacci retracement level of the June low to July high move. This level aligns with the 0.6070 psychological resistance.

Dynamic support rests at the 100-period SMA of 0.6038.

NZD/USD 4-hour chart

On the daily chart, NZD/USD continues to trade within a rising wedge formation, characterized by converging upward-sloping trendlines. This pattern typically signals a potential bearish reversal, especially when formed near key resistance zones.

NZD/USD daily chart

The Relative Strength Index (RSI) is currently at 54, indicating mild bullish momentum but without conviction. This aligns with the 4-hour chart, where a symmetrical triangle is forming just beneath the same resistance zone, suggesting near-term consolidation within a broader, potentially weakening uptrend. 

A downside break below wedge support on the daily chart, particularly beneath the 61.8% Fibonacci retracement level of the September-April decline near 0.6038, would add weight to bearish risks. In contrast, a breakout above the July high of 0.6120 could invalidate the pattern and signal a continuation toward 0.6379 (the 78.6% Fibonacci level of the longer-term move).