Forex: NZD/USD Technical Analysis – Topping Confirmation Pending
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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: 0.8590 (trend line), 0.8630 (Apr 11 close)
The New Zealand Dollar may be topping against its US counterpart having edged past a rising trend line set from early February after forming a Bearish Engulfing candle pattern. Near-term support is now in the 0.8500-13 area, marked by the October 22 close and 23.6% Fibonacci retracement, with a break below that exposing the 38.2% Fib at 0.8414. Trend line support-turned-resistance is now at 0.8590. Above that aims for the April 11 close at 0.8630.
Risk/reward considerations argue against entering short with prices so close to support. On the other hand, taking up the long side looks premature absent a defined reversal signal. We will continue to stand aside until a more actionable setup emerges.
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.