NZD/USD Technical Strategy: FLAT
- New Zealand Dollar down trend intact despite 2 weeks of standstill
- Break below July swing low sought for opportunity to enter short
- Close through resistance above 0.68 needed to invalidate bearish bias
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The New Zealand remains locked in a well-defined down trend against its US counterpart despite over two weeks of sideways consolidation. Price action has been marked by a clear-cut series of lower highs and lows since a reversal from triple top resistance in mid-April.
From here, a daily close below support in the 0.6688-0.6726 area opens the door for a challenge of the 38.2% Fibonacci expansion at 0.6589. Alternatively, a reversal above 0.6851 – support-turned-resistance reinforced by a falling trend line – paves the way for a test of the 38.2% Fib retracement at 0.6959.
Prices are too close to immediate support to justify establishing a short position from a risk/reward perspective. Alternatively, taking up the long side even tactically seems ill-advised absent a viable bullish reversal signal. With that in mind, opting for the sidelines is probably most prudent for now.
NZD/USD TRADING RESOURCES
- Just getting started? See our beginners’ guide for FX traders
- Having trouble with your strategy? Here’s the #1 mistake that traders make
- Join a free Trading Q&A webinar and have your questions answered
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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