NZD/USD Technical Analysis: Prices Drop to 5-Year Low
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- NZD/USD Technical Strategy: Flat
- Support: 0.7024, 0.6956, 0.6871
- Resistance:0.7126, 0.7231, 0.7333
The New Zealand Dollar tumbled against its US namesake after the RBNZ issued an unexpected interest rate cut, threatening to overturn an earlier trend line breach. A daily close below the 0.7024-61 area (June 5 low, 23.6% Fibonacci expansion) exposes the 38.2% level at 0.6956. Alternatively, a reversal above the 14.6% Fib at 0.7126 clears the way for a challenge of the June 10 high at 0.7231.
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 an actionable opportunity to present itself.
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--- 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.