NZD/USD Technical Analysis: Kiwi Rallies Most in 4 Months
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- NZD/USD Technical Strategy: Flat
- Support: 0.7872, 0.7697, 0.7597
- Resistance:0.7973, 0.8138, 0.8271
The New Zealand Dollar rebounded as expected against its US counterpart after putting in a bullish Piercing Line candlestick pattern. A daily close above the 23.6% Fibonacci retracement at 0.7973 exposes the 0.8097-0.8138 area marked by a falling trend line and the 38.2% level. Alternatively, a turn back below the 14.6% retracement at 0.7872 clears the way for a challenge of the 0.7697-0.7708 area marked by the July 2013 bottom and the 61.8% Fib expansion.
While a long position seems tempting from a purely technical perspective, we will tactically opt to stand aside. The dominant down trend initiated in mid-July remains in place. Furthermore, the proximity of key event risk by way of US employment data warns against taking directional bets on sentiment-sensitive currencies, including the Kiwi. On balance, 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