Forex: NZD/USD Technical Analysis – Head and Shoulders Forming?
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- NZD/USD Technical Strategy: Flat
- Support: 0.8513 (Oct 22 close), 0.8452 (38.2% Fib ret.)
- Resistance: 0.8649 (trend line), 0.8675 (Apr’13 high)
New Zealand Dollar turned lower as expected against its US namesake after prices completed a Bearish Engulfing candlestick pattern below resistance at the April 2013 high (0.8675). The pair has since bounced from support at 0.8513, the October 22 close, with a move through rising trend line support-turned-resistance at 0.8649 aiming for 0.8675 anew. Alternatively, a reversal below support targets the 38.2% Fibonacci retracement at 0.8452.
There appears to be a possibility that a Head and Shoulders top being carved out below the April high with 0.8513 serving as the pattern’s neckline, but confirmation is absent for the time being. We will stand aside for now, monitoring the pair for an actionable trade setup.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com