NZDUSD continues on its downtrend with its lower highs and lower lows inside a descending channel on its 1-hour time frame. Price is currently testing the resistance and holding could send it back down to the bottom.

The 100 SMA is safely below the longer-term 200 SMA to confirm that the path of least resistance is to the downside. In other words, the selloff is more likely to gain traction than to reverse. Price is currently trading above the 100 SMA dynamic inflection point, though, so this signals a bit of bullish pressure. The 200 SMA is just slightly above the channel top to add another layer of resistance.

RSI is heading down from the overbought zone to show that sellers are regaining the upper hand while buyers take a break. This oscillator has yet to cross the center line and has plenty of room to move lower, which suggests Kiwi bears could stay in play for a bit longer. Stochastic is also indicating overbought conditions and is heading down to show that sellers are ready to jump back in.

In that case, NZDUSD could make its way down to the bottom of the channel at the .6450 minor psychological mark or at least until the mid-channel area of interest near the 100 SMA.

The Kiwi is under a lot of pressure on account of the recent RBNZ rate cut and expectations of another easing move later this year. In addition, worsening trade tensions between the US and China might also prove very bearish for this commodity-based export-driven currency.

Meanwhile, the dollar might still be poised to take some safe-haven flows even as the prospect of retaliatory trade measures could wind up doing the most damage on the US economy. The FOMC minutes did indicate that policymakers could keep rates on hold for the rest of the year.