New Zealand Dollar Weakness May Accelerate As Bullish Conviction Fades
Last week I was prudent to close out my short USD/CAD trade, I saw potential for a retrace back to the 20-Day SMA but didn’t take advantage of the move as I still see the larger trend lower. A break above the technical level has cast some doubt on another run at parity. Additionally, the dollar has started to generate broader support as the February labor report is expected to show the U.S. economy added jobs.
I continue to wait for a break below the 200-Day SMA at 0.7013 for the NZD/USD for a short position. Today’s reversal has fueled my conviction, as we have seen long wicks on the past two daily candles which is a clear sign that bullish conviction is fading. My initial target will be 0.6850-3/5 low.
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