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Talking Points:
- NZD/USD Technical Strategy: Flat
- Support: 0.8555 (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 turned lower as expected against its US namesake after putting in a Bearish Engulfing candlestick pattern below resistance at 0.8745, the April 10 high. Sellers are now testing support at 0.8555, a rising trend line set from late March. A break below this barrier exposes the 0.8500-13 area, marked by the 38.2% Fibonacci retracement and the October 22 close. Alternatively, a daily close above 0.8606, the 23.6% level, targets the 14.6% Fib at 0.8672.
Prices are too close to relevant support to justify a short position from a risk/reward perspective. We will remain on the sidelines for now, waiting for a more actionable trade setup to present itself.
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Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
