NZD/USD Technical Analysis – Rally Rejected Below 0.88
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- NZD/USD Technical Strategy: Flat
- Support: 0.8737, 0.8700, 0.8643
- Resistance:0.8779-93, 0.8834, 0.8875
The New Zealand Dollar is edging lower as expected against its US namesake after finding resistance below the 0.88 figure. Sellers are testing 0.8737, marked by resistance-turned support dating back to April and a rising channel bottom. A break below this barrier on a daily closing basis initially exposes the 23.6% Fibonacci retracement at 0.8700. Alternatively, a rebound through the 0.8779-93 zone bracketed by the May 6 high and the 38.2% Fib expansion clears the way for a challenge of the 50% threshold at 0.8834.
Risk/reward considerations argue against entering short with prices sitting in close proximity to support. On the other hand, the absence of a defined bullish reversal signal suggests taking up the long side is premature. We will remain flat for now.
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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.