NZD/USD Technical Analysis – Resistance Met Above 0.85
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- NZD/USD Technical Strategy: Flat
- Support: 0.8391-0.8415 (horizontal pivot, 50% Fib ret.), 0.8329 (61.8% Fib ret.)
- Resistance:0.8500-23 (38.2% Fib ret., neckline), 0.8607 (23.6% Fib ret.)
The New Zealand Dollar fell as expected against its US namesake after putting in a Bearish Engulfing candlestick pattern. A corrective upswing has put prices at resistance in the 0.8500-23 area, marked by the 38.2% Fibonacci retracement and neckline dating back to mid-March. A break higher initially targets the 23.6% level at 0.8607. Alternatively, a daily close below support in the 0.8391-0.8415 region, the site of the 50% Fib and a horizontal pivot dating back to September 2013, eyes the 61.8% retracement at 0.8329.
Risk/reward considerations argue against entering long with prices sitting squarely at resistance. On the other hand, taking up the short side seems premature absent a defined bearish reversal signal. We will remain flat for now.
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.