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Talking Points:
- NZD/USD Technical Strategy: Flat
- Support: 0.8554 (trend line), 0.8500-13 (38.2% Fib ret., Oct 22 close)
- Resistance: 0.8607 (23.6% Fib ret.), 0.86722 (14.6% Fib ret.)
The New Zealand Dollar declined against its US counterpart as expected after prices produced a Bearish Engulfing candlestick pattern below resistance at 0.8745, the April 10 high. Near-term support is now at 0.8554, a rising trend line set from late March, with a break downward targeting 0.8500-13 area marked by the 38.2% Fibonacci retracement and the October 22 close. The 23.6% level at 0.8606 comes in as initial resistance, with a reversal above that on a daily closing basis exposing the 14.6% Fib at 0.8672.
Risk/reward considerations argue against taking a trade at present withprices wedged too closely between near-term up- and down-side technical barriers. We will continue to wait on the sidelines for the time being.
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Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
