Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

Free Trading Guides
Subscribe
Please try again
Select

Live Webinar Events

0

Economic Calendar Events

0

Notify me about

Live Webinar Events
Economic Calendar Events

H

High

M

Medium

L

Low
More View More
NZD/USD Price Outlook: Kiwi Carries Breakout Potential

NZD/USD Price Outlook: Kiwi Carries Breakout Potential

What's on this page

The New Zealand Dollar has continued to trade just below multi-month slope resistance with the initial October opening-range in focus heading into the close. Here are the updated targets and invalidation levels that matter on the NZD/USD charts. Review this week’s Strategy Webinar for an in-depth breakdown of this setup and more.

New to Forex Trading? Get started with this Free Beginners Guide

NZD/USD Daily Price Chart

NZD/USD Daily Price Chart

Technical Outlook: In my Weekly Technical Outlook on the New Zealand Dollar, our ‘bottom line’ noted that Kiwi was, “trading just above key confluence support at 6453/88 and IF prices are going to post some sort of near-term recovery this would be the spot.” Kiwi registered a low at 6424 just two days later before reversing sharply back toward the upper parallel of the pitchfork formation we’ve been tracking off the yearly highs.

Despite the volatility, NZD/USD continues to trade within the confines of the October opening-range and we’ll be looking for the break to offer further guidance on our medium-term directional bias. Critical daily support rests at 6453/65 – a region defined by the 2015 low-week close, the yearly low-day close and the 78.6% retracement of the October advance. A topside breach of the descending pitchfork is needed to suggest a more significant low is in place.

Learn how to Trade with Confidence in our Free Trading Guide

NZD/USD 240min Price Chart

NZD/USD 240min Price Chart

Notes: I’m working with a slightly different slope on the intraday chart but the same levels are reflected. Looking for support ahead of 6496 if price is indeed heading higher. Near-term resistance stands at 6555 backed by 6595 with a breach above 6624/40 needed fuel the next leg higher. Weakness sub-6453 would risk considerable losses with subsequent support targets seen at the yearly low at 6424 and the 2016 low at 6347.

Even the most seasoned traders need a reminder every now and then- Avoid these Mistakes in your trading

Bottom line: The immediate range in focus heading into the close of the month is 6453-6640 – look for the break for guidance. From a trading standpoint, I’ll favor fading weakness while within this near-term structure ultimately targeting a breach of this multi-month descending formation. Look for an early-week low near the lower parallel IF this is going to work. We’re light on Kiwi data this week with lots of US event risk on tap- ending with Non-Farm Payrolls on Friday. Tread lightly here into the monthly open.

For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy

NZD/USD Trader Sentiment

NZD/USD Trader Sentiment
  • A summary of IG Client Sentiment shows traders are net-long NZD/USD - the ratio stands at +1.67 (62.5% of traders are long) – bearishreading
  • Traders have remained net-long since September 20th; price has moved 0.3% lower since then
  • Long positions are5.8% higher than yesterday and 2.9% lower from last week
  • Short positions are 2.3% lower than yesterday and 1.8% lower from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests NZD/USD prices may continue to fall. However, traders are more net-long than yesterday but less net-long from last week and the combination of current positioning and recent changes gives us a further mixed NZDUSD trading bias from a sentiment standpoint.

See how shifts in NZD/USD retail positioning are impacting trend- Learn more about sentiment!

---

Relevant NZD/USD Data Releases

NZD/USD Economic Calendar

Economic Calendar - latest economic developments and upcoming event risk. Learn more about how we Trade the News in our Free Guide !

Active Trade Setups

- Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex or contact him at mboutros@dailyfx.com

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES