Forex: NZD/USD Technical Analysis – Trend Line Marks Resistance
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- NZD/USD Technical Strategy: Flat
- Support: 0.8196 (38.2% Fib ret.), 0.8141 (23.6% Fib ret.)
- Resistance: 0.8241 (50% Fib ret., trend line), 0.8286 (61.8% Fib ret.)
The New Zealand Dollar is pausing to consolidate after recoiling upward (as we suspected). Breaking above resistance at 0.8241, a barrier marked by the 50% Fibonacci retracement and a falling trend line set from mid-January, targets the 61.8% level at 0.8286. Alternatively, a turn below support at 0.8196 – the 38.2% Fib – exposes the 23.6% retracement at 0.8141.
Entering long at current levels is unattractive from a risk/reward perspective with prices squarely at resistance. On the other hand, assuming resistance will hold and entering short without a defined reversal signal seems premature. We will remain flat for now until something more compelling is noted.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com