Forex: NZD/USD Technical Analysis – Turn Lower Hinted Sub-0.83
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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 may be setting up for a move lower against its US namesake after prices put in a Shooting Star candlestick below resistance at 0.8481, the 50% Fibonacci expansion. Near-term support is at 0.8380, marked by the 38.2% level and reinforced by a falling trend line set from mid-October, with a break below that exposing the 23.6% Fib at 0.8254. Alternatively, a turn above resistance targets the 61.8% expansion at 0.8583.
A Shooting Star candle is a sign of indecision that requires confirmation to become an actionable reversal signal, meaning a short trade is premature for now. It is enough of a warning sign to make a case against entering long however. Furthermore, prices are too close to relevant resistance to justify buying the pair on risk/reward grounds. We will continue to stand aside 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.