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NZD/USD Technical Analysis: Tactically Opting to Exit Short

NZD/USD Technical Analysis: Tactically Opting to Exit Short

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Talking Points:

  • NZD/USD Technical Strategy: Flat
  • Resistance Below 0.66 in Focus After Break of Monthly Range Top
  • Tactically Opting to Exit NZDUSD Position, Wait to Re-Enter Short

The New Zealand Dollar may continue higher against it’s against its US counterpart after prices edged through monthly range resistance. The pair has failed to make continued headway after dropping to a six-year low below the 0.62 figure.

From here, a daily close above the 23.6% Fibonacci retracement at 0.6561 opens the door for a challenge of the 38.2% level at 0.6787. Alternatively, a move back below the 23.6% Fib expansion at 0.6406 – now recast as support – clears the way for a test of the 0.6219-44 area, marked by the 38.2% threshold and the September 7 low.

We sold NZDUSD at 0.6370. The move through range resistance after a prolonged period of sideways trade suggests that a near-term resumption of the longer-term down trend will probably have to wait for a while longer. With that in mind, we will exit the position despite having not met our stop-loss conditions, opting not to sit through continued dithering while incurring negative roll cost in the process. Rather, we will move to the sidelines and wait for selling pressure to return in earnest before re-entering short.

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