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NZD/USD Technical Analysis: Candle Setup Hints at Bounce

NZD/USD Technical Analysis: Candle Setup Hints at Bounce

Ilya Spivak, Head Strategist, APAC

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Talking Points:

  • 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

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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