NZD/USD Technical Analysis: All Eyes on 16-Month Support
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- NZD/USD Technical Strategy: Flat
- Support: 0.7672, 0.7633, 0.7583
- Resistance:0.7712, 0.7761, 0.7805
The New Zealand Dollar overturned bullish cues noted earlier in the week to test 16-month support against its US namesake. Near-term support is in the 0.7672-82 area marked by the July 2013 low and the 50% Fibonacci expansion, with a break below that on a daily closing basis exposing the 61.8% level at 0.7633. Alternatively, a turn above the 38.2% Fib at 0.7712 clears the way for a challenge of the 23.6% expansion at 0.7761.
Risk/reward considerations argue against entering short with prices 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, waiting for a more actionable opportunity to present itself.
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Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com