NZD/USD: RBNZ Breakout Approaching Initial Resistance Targets
- NZDUSD Post-RBNZ breakout eyes initial- Constructive above 7000
- Updated targets & invalidation levels
Chart prepared by Michael Boutros
Technical Outlook: Kiwi rallied through confluence resistance on the back of last night’s RBNZ interest rate decision with the breakout now eyeing initial resistance targets at 7152 & 7175. These levels are defined by the 61.8% retracement of the April 2015 high and the 2011 low-day close. The immediate topside bias is at risk heading into these levels with key support & bullish invalidation seen at 6970-7005. A breach above resistance targets subsequent topside objectives at 7320 backed by a Fibonacci confluence at 7412/15.
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Notes: The pair has been trading within the confines of this ascending median-line structure off the May lows with the rally fizzling out just ahead of targeted resistance into 7153. Look for interim support at the London low at 7090 backed by 7053 & the 70-handle; I’d be looking for long triggers on a move into this region with a breach higher eyeing channel resistance (currently ~7260) and 7321.
A quarter of the daily average true range (ATR) is rather tight here at just 19 pips but I expect we’ll see this start to pick up heading into next week’s the highly anticipated FOMC policy meeting. Keep in mind we also get the release of New Zealand 1Q GDP on the same day and could fuel added volatility in USD & NZD crosses. Continue tracking this setup and more throughout the week- Subscribe to SB Trade Desk and take advantage of the DailyFX New Subscriber Discount.
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Relevant Data Releases
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---Written by Michael Boutros, Currency Strategist with DailyFX
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