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Talking Points:
- NZD/USD Technical Strategy: Short at 0.6475
- New Zealand Dollar Aims to Extend Down Move After Breaking Another Support Level
- Short Position Triggered, Looking for a Decline Below the 0.64 Figure vs. US Dollar
The New Zealand Dollar broke through another level of chart support, hinting that a move below the 0.64figure against its US counterpart is in the cards ahead. Near-term losses would extend a down move launched in mid-October that may prove to mark resumption of the 16-month bearish trend launched in mid-July 2014.
From here, the next level of support comes in at 0.6391, the 76.4% Fibonacci retracement. A break below that on a daily closing basis opening the door for a test of a double bottom marked by the September 7 low at 0.6243. Alternatively, a reversal back above the 0.6488-97 area bracketed by the 61.8%Fib and a horizontal pivot in play since mid-July clears the way for a challenge of the 50% retracement at 0.6566.
Positioning now seems attractive to attempt taking part in the near-term down move and we will enter short, initially targeting 0.6391. A stop-loss will be activated on a daily close above 0.6507, the July 16 close. We will take profit on half of the position and move the stop-loss to breakeven once the first objective is reached.
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