NZDUSD has been in a steep decline after peaking at the five-month high of 0.6410 in July. However, the pair has managed to temporarily pause its retreat following its bounce off 0.5902, which is the 61.8% Fibonacci retracement of the 0.5510-0.6536 upleg.

The short-term oscillators currently suggest that positive momentum is picking up but bearish forces remain in control. Specifically, the MACD is strengthening but holds below both zero and its red signal line, while the RSI is hovering deep in the negative zone after rebounding from its 30-oversold mark.

If the pair manages to jump above the descending trendline that connects a series of lower highs since July, immediate resistance could be found at the 50.0% Fibo of 0.6023. Should that barricade fail, the 38.2% Fibo of 0.6144, which overlaps with the 50-day simple moving average (SMA), could prove to be the next obstacle for buyers to overcome. Surpassing that zone, the price could ascend towards the 23.6% Fibo of 0.6294 ahead of the five-month peak of 0.6410.

Alternatively, should the bears attempt to push the price lower, the 61.8% Fibo of 0.5902 could act as the first line of defence. Piercing through that zone, the pair could face the 78.6% Fibo of 0.5730. A break below that region could pave the way for the October 2022 bottom of 0.5510.

Overall, it seems that NZDUSD’s latest downtrend is running out of steam. However, a break above the downward sloping trendline is needed to validate the resumption of the pair’s recovery.