NZD/USD Technical Analysis – Standing Aside Before RBNZ
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- NZD/USD Technical Strategy: Flat
- Support: 0.8557 (trend line), 0.8513 (Oct 22 close)
- Resistance: 0.8656 (14.6% Fib exp.), 0.8718 (23.6% Fib exp.)
The New Zealand fell as expected against its US namesake after prices put in a bearish Dark Cloud Cover candlestick pattern. The pair is now attempting to mount a rebound from rising trend line support set from mid-March, with buyers eyeing initial resistance at 0.8656 marked by the 14.6% Fibonacci expansion. A break above this barrier exposes the 23.6% level at 0.8718. Alternatively, a move below the trend line (now at 0.8557) targets the October 22 close at 0.8513.
We will tactically opt to stay on the sidelines for now, waiting for the outcome of tomorrow’s RBNZ monetary policy announcement. Traders are pricing in a 97 percent probability of a 25bps rate hike according to data from Credit Suisse. That hints tightening alone will amount to the status quo and may not spark upside momentum absent a firm accompanying statement.
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.