NZD/USD Technical Analysis – Rally Capped Below 0.84
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- NZD/USD Technical Strategy: Flat
- Support: 0.8297(50% Fib ret.), 0.8239 (38.2% Fib ret.)
- Resistance: 0.8355 (61.8% Fib ret.), 0.8427 (76.4% Fib ret.)
The New Zealand Dollar rose as we suspected, with a break above falling trend line resistance seemingly overturning the bearish bias prevalent since mid-January. A Shooting Star below resistance marked by the 61.8% Fibonacci retracement at 0.8355 hints at a potential reversal however. Breaking below support at 0.8297, the 50% level, exposes the 38.2% Fib at 0.8239. Alternatively, a reversal above resistance targets the 76.4% retracement at 0.8427.
A short position at current levels looks unattractive from a risk/reward perspective as prices trade squarely at relevant support. On the other hand, a long trade seems premature absent confirmation of reversal. On balance, we will remain on the sidelines for now.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com