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Talking Points:
- NZD/USD Technical Strategy: Flat
- Support: 0.7674, 0.7602, 0.7469
- Resistance:0.7868, 0.8051, 0.8138
The New Zealand Dollar may be carving out a bottom against its US counterpart as prices reveal a Bullish Engulfing candlestick pattern. Near-term channel top resistance is at 0.7868, with a break above that on a daily closing basis exposing the 0.8034-51 area marked by the October 21 high and the February 2014 bottom. Alternatively, a turn below the 0.7674-82 area (channel floor, July 2013 low) clears the way for a challenge of the 38.2% Fibonacci expansion at 0.7602.
Confirmation of reversal needed to get long requires a daily close above the channel top, which is absent for now. On the other hand, the absence of a defined bearish reversal signal warns against taking up the short side. We will remain on the sidelines for now.
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Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
