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Talking Points:
- NZD/USD Technical Strategy: Flat
- Support: 0.8500-13 (38.2% Fib ret., Oct 22 close), 0.8415 (50% Fib ret.)
- Resistance:0.8556 (trend line), 0.8607 (23.6% Fib ret.
The New Zealand Dollar declined against its US counterpart as expected after prices formed a Bearish Engulfing candlestick pattern. A break below rising trend line set from late March has exposed the 0.8500-13 area, marked by the 38.2% Fibonacci retracement and the October 22 close. A further push below that aims for the 50% level at 0.8415. The trend line – now at 0.8556 – has been recast as resistance, with a turn back above that eyeing the 23.6% Fib at 0.8607.
The available trading range is too narrow to allow for a short trade from a risk/reward perspective. We will begrudgingly stand aside for now, waiting for an attractive entry opportunity to present itself.
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Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
