NZD/USD Technical Analysis – Is a Larger Downturn Ahead?
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- NZD/USD Technical Strategy: Flat
- Support: 0.8667-75 (Apr’13 high, 23.6% Fib exp.), 0.8513 (Oct 22 close)
- Resistance: 0.8762 (38.2% Fib exp.), 0.8839 (50% Fib exp.)
The New Zealand may be signaling a reversal lower is ahead against its US counterpart after prices completed a bearish Dark Cloud Cover candlestick pattern. Negative RSI divergence bolsters the case for a downside scenario. Sellers are testing resistance-turned-support in the in the 0.8667-75 area, marked by the April’13 high and the 23.6% Fib. A break below this boundary initially exposes the October’13 top at 0.8513. Near-term resistance is at 0.8762, the 38.2% Fib, with a push above that eyeing the 50% expansion at 0.8839.
Prices are too close to relevant support to justify selling the pair at current levels from a risk/reward perspective. We will stand aside for now, waiting for confirmation of a breakdown to pull the trigger on a short position.
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.