Forex: NZD/USD Technical Analysis – 11-Month High Under Fire
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- NZD/USD Technical Strategy: Flat
- Support: 0.8639 (23.6% Fib exp.), 0.8570 (trend line)
- Resistance: 0.8675 (Apr’13 high), 0.8725 (38.2% Fib exp.)
New Zealand Dollar pushed aggressively higher against its US counterpart to test resistance at 0.8675, the April 2013 swing high. A break above this barrier aims for the 38.2% Fibonacci expansion at 0.8725. Alternatively, a reversal below the 23.6% level at 0.8639 targets a rising trend line set from February, now at 0.8570.
Negative RSI divergence warns of a possible turn lower ahead but confirmation is lacking, suggesting a short trade is premature. On the other hand, entering long with prices squarely at resistance is unattractive from a risk/reward perspective. 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