Forex: NZD/USD Technical Analysis – Buyers Challenge 0.85 Figure
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- NZD/USD Technical Strategy: Flat
- Support: 0.8380 (trend line, 38.2% Fib exp.), 0.8254 (23.6% Fib exp.)
- Resistance: 0.8481 (50% Fib exp.), 0.8583 (61.8% Fib exp.)
The New Zealand Dollar accelerated higher after breaking chart resistance earlier this week. Buyers are testing resistance at 0.8481, the 50% Fibonacci expansion, with a break above that targeting the 61.8% level at 0.8583. Alternatively, a reversal back below the 0.8380 – the intersection of the 38.2% Fib and falling trend line set from mid-October – eyes the 23.6% expansion at 0.8254.
We begrudgingly opted not to pursue a long position, worrying that the Kiwi’s sensitivity to risk appetite trends cast doubt on the extent of upside follow-through. While those concerns have proven unfounded thus far, we continue to see the possibility that tomorrow’s US jobs data or the continued crisis in the Ukraine sparks risk aversion and forces the Kiwi lower. Furthermore, risk/reward parameters are now skewed against a long trade as prices tap resistance. All told, we remain sidelined for now.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.