Forex: NZD/USD Technical Analysis – Trend Support Under Fire
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- NZD/USD Technical Strategy: Flat
- Support: 0.8608 (trend line), 0.8513 (Oct’13 top)
- Resistance: 0.8675 (Apr’13 high), 0.8725 (38.2% Fib exp.)
New Zealand Dollar may be carving out a top against its US counterpart as prices show a Bearish Engulfing candlestick pattern below resistance at 0.8675, the April 2013 high. Negative RSI divergence bolsters the case for a downside scenario. Near-term support is at 0.8608, marked by a rising trend line set from early February, with a break below this barrier targeting the October 2013 top at 0.8513. Alternatively, a reversal above 0.8675 initially exposes the 38.2% Fib at 0.8725.
Prices are too close to relevant support to justify entering short from a risk/reward perspective. Furthermore, a breakdown has not been confirmed absent a daily close below trend line support. 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