• A declining highs structure has confirmed a bearish reversal in the asset.
• Negative risk traction has underpinned the greenback bulls.
• Stabilization below the 200-period EMA is supporting the downside bias.

The NZDUSD pair is displaying a rangebound structure in the early Tokyo session after facing barricades near the round-level resistance of 0.5800. The pullback move from Thursday’s low at 0.5741 could get concluded due to the risk-aversion theme.

The market profile is extremely negative post hawkish guidance from the Federal Reserve (Fed) and has forced economists to slash already weak economic projections and earnings guidance. Meanwhile, the US dollar index (DXY) is aiming to shift comfortably above the immediate hurdle of 113.00.

On an hourly scale, the commodity-linked currency has turned extremely weak as the asset has formed a lower-high lower-low structure, which indicates a bearish reversal. Stabilization below the 200-period Exponential Moving Average (EMA) at 0.5798 is supporting the downside bias.

The 20-period EMA at 0.5786 has slipped below the 200-EMA, which signals that the downside momentum has been triggered.

Also, the Relative Strength Index (RSI) (14) is struggling to break the 40.00 hurdle on the upside.

Going forward, a downside break of Thursday’s low at 0.5741 will drag the commodity-linked pair toward the round-level support at 0.5700, followed by October 24 low at 0.5657.

Alternatively, the kiwi bulls could regain strength if the asset oversteps October 31 high at 0.5836, which will drive the asset towards Tuesday’s high at 0.5903. A breach of the latter will expose the asset to recapture November’s high at 0.5944.

NZDUSD hourly chart