NZD/USD Technical Analysis: Key Channel Support Broken
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- NZD/USD Technical Strategy: Flat
- Support: 0.8733, 0.8669, 0.8618
- Resistance:0.8779-93, 0.8835-42, 0.8886
The New Zealand Dollar broke downward against its US counterpart, dropping to the lowest level in a week. Sellers are aiming to test support at 0.8733, the 23.6% Fibonacci retracement, with a daily close below that exposing the 38.2% level at 0.8669. Alternatively, a reversal above resistance in the 0.8779-93 area, marked by the May 6 and June 27 swing highs as well as a broken channel floor, exposes the 0.8835-42 region (major swing high from August 2011, July 10 top).
Risk/reward considerations argue against entering short with prices trading too close to support. On the other hand, the absence of a defined bullish reversal signal warns against taking up the long side. 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.