NZD/USD Technical Analysis: Candle Setup Hints at Bounce
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- NZD/USD Technical Strategy: Flat
- Support: 0.6814, 0.6749, 0.6661
- Resistance:0.6950, 0.7033, 0.7169
The New Zealand Dollar produced a bullish Morning Star candlestick pattern to suggest that a move higher against its US namesake may be around the corner. Near-term resistance is at 0.6950, the 14.6% Fibonacci retracement, with a break above that on a daily closing basis exposing the 23.6% level at 0.7033. Alternatively, a turn below the June 23 low at 0.6814 opens the door for a test of falling channel floor support at 0.6749.
Technical and risk/reward considerations argue in favor of a long position but we will tactically opt to stand aside for now. Strong RBNZ rate cut expectations and the threat of risk aversion triggered by Greece-related news-flow make for a worrisome fundamental backdrop. As such, we will err on the side of caution and stay flat.
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com