NZD/USD Price Forecast: Under growing pressure, nears support at 0.5750

• The New Zealand Dollar remains on the defensive against the USD, approaching 0.5700 support.
• News of a China-US trade deal has. failed to provide any significant support to the Kiwi.
• Technical indicators point to a deeper correction from 0.5800 highs.

 The New Zealand Dollar is coming into growing bearish pressure against the US Dollar, following its rejection from the 0.5805 area on Wednesday. The bearish engulfing candle printed in the daily chart, and the lower high on Thursday suggest that the bullish cycle from mid-October lows has run out of steam.

On Wednesday, the hawkish comments from the Federal Reserve's Chairman, Jerome Powell, sent the US Dollar flying across the board. The New Zealand Dollar, however, is failing to regain lost ground despite the positive news from the Trump-Xi meeting, which highlights the negative momentum.

Technical Analysis: Potential Head & Shoulders pattern

From a technical perspective, recent price action reveals a potential bearish Head & Shoulders pattern, visible in the 4-hour chart, which is a common figure to anticipate trade shifts. The Relative Strength Index (RSI) in the mentioned timeframe has crossed below the 50 level, and the Moving Average Convergence Divergence is showing growing downward pressure, with the red bars in the histogram growing higher.

Brars, however, will have to confirm below the confluence of trendline support from the mentioned October 14 low, now at 1.5760, with Thursday's low, and the headline of the H&S figure, at 0.5750. The H&S's measured target lies right below the October 17 and 21 lows, at the 0.5710 area.

To the upside, resistances are at Thursday's high of 0.5800 ahead of the October 6 high, at 0.5850. A confirmation beyond here would cancel the bearish structure of lower highs and lower lows from mid-September highs, and shift the focus to the area of 0.5915 (September 11 low).

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