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NZD/USD Technical Analysis: Six-Day Win Streak Broken

NZD/USD Technical Analysis: Six-Day Win Streak Broken

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Talking Points:

  • NZD/USD Technical Strategy: Flat
  • Prices Drop Most in 3 Weeks, Breaking Longest Win Streak Since 2012
  • Risk/Reward Considerations Argue Against Entering Short Trade Now

The New Zealand Dollar turned sharply lower against its US namesake, issuing the largest daily drop in three weeks. The decline marked the end of a seven-day winning streak, the longest series of consecutive gains in almost three years.

Near-term support is now at 0.6621, the intersection of a recently broken falling trend line and the 23.6% Fibonacci retracement. A break below this barrier on a daily closing basis initially opens the door for a test of the 38.2% level at 0.6547. Alternatively, a move back above the 14.6% Fib at 0.6666 clears the way for a challenge of the October 12 high at 0.6740.

We have argued that the dominant NZDUSD trend continues to favor the downside, painting the recent upswing as corrective. With that in mind, we have been waiting for the move to fizzle and offer a selling opportunity. However, prices’ proximity to near-term support argues against pulling the trigger now from a risk/reward perspective. We will remain flat, waiting for a more attractive opportunity to present itself.

Losing Money Trading Forex? This Might Be Why.

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