Forex: NZD/USD Technical Analysis – Struggling to Extend Lower
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- NZD/USD Technical Strategy: Flat
- Support: 0.8500-13 (Oct 22 close, 23.6% Fib ret.), 0.8414 (38.2% Fib ret.)
- Resistance: 0.8574 (trend line), 0.8630 (Apr 11 close)
The New Zealand Dollar is struggling to extend downward against its US counterpart having formed a Bearish Engulfing candlestick pattern and broken a rising trend line set from early February. Prices are flat-lined above support in the 0.8500-13 area, marked by the October 22 close and 23.6% Fibonacci retracement. A push below this barrier targets the 38.2% Fib at 0.8414. Trend line support-turned-resistance is now at 0.8574.
Prices are too close to relevant support to justify a short position from a risk/reward perspective. On the other hand, entering a long trade looks premature absent a defined bullish reversal signal. We will continue to stand aside for now, waiting for a more attractive setup to present itself.
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.