NZD/USD Technical Analysis – Waiting to Confirm Reversal
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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 readying to turn lower against its US namesake after prices put in a bearish Dark Cloud Cover candlestick pattern. Negative RSI divergence bolsters the case for a downside scenario. All eyes are on resistance-turned-support in the in the 0.8667-75 area, marked by the April’13 high and the 23.6% Fib. A daily close below this threshold initially targets the October’13 top at 0.8513. Near-term resistance is at 0.8762, the 38.2% Fib, with a move above that exposing the 50% expansion at 0.8839.
Risk/reward considerations argue against entering short with prices trading in close proximity to relevant support. We will stand aside for now, waiting for confirmation of reversal to look for selling opportunities.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com