NZDUSD Testing Slope Support- Rebound to Offer Short Entries
- NZDUSD at confluence support- Broader outlook bearish
- Updated targets & invalidation levels
- Event Risk on Tap This Week
Chart Created Using FXCM Marketscope 2.0
Technical Outlook: NZDUSD is testing confluence support at 6525 where the 78.6% retracement converges on a pair of median-lines extending off the October & December highs. The immediate short-bias is at risk while above this threshold with interim resistance eyed at 6592-6600 backed by the median-line extending off the December 16th high ~6640 (near-term bearish invalidation).
A break lower targets a more significant support zone at 6455/63, with subsequent objectives at 6413 & 6361. Note that daily momentum is holding just above 40- suggesting that shorts remain vulnerable near-term. Bottom line- the pair is at downtrend support & a rebound here would likely offer favorable short entries higher up.
Notes: Kiwi is trading within the confines of a well-defined embedded descending channel formation with slight momentum divergence into the lows suggesting that downside pressure may be waning here. Look for a breach of channel resistance to trigger a rally towards resistance at 6596-6600 with a breach above the median-line needed to invalidate the short-bias.
A break lower targets 6463/69 backed by the November low at 6427 & the longer-term 76.4% retracement at 6361. A quarter of the daily average true range yields profit targets of 19-21 pips per scalp. Added caution is warranted heading into the China’s trade balance figures tomorrow & U.S. Retail Sales on Friday with the releases likely to fuel volatility in risk sensitive assets & the dollar crosses.
For updates on this setup and more throughout the week, subscribe to SB Trade Desk and take advantage of the DailyFX New Subscriber Discount!
Avoid the pitfalls of near-term trading strategies by steering clear of classic mistakes. Review these principles in the "Traits of Successful Traders” series.
Relevant Data Releases
Other Setups in Play:
- Webinar: EUR, AUD Pose Brisk Start to the Week- Crosses in Focus
- AUD/NZD Slope ofInfluence Highlights Key Inflection Point
- EUR/USD Short-Term Strategy: Sell Rips Sub-1.0880
- NZD/JPY Testing Support- Outlook Remains Bearish Sub-81.40
- AUD/JPY at Support, For Now
---Written by Michael Boutros, Currency Strategist with DailyFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.