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NZD/USD Technical Analysis: Struggling to Build Momentum

NZD/USD Technical Analysis: Struggling to Build Momentum

Ilya Spivak, Head Strategist, APAC

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Talking Points:

  • NZD/USD Technical Strategy: Flat
  • Kiwi Dollar Probes Two-Week Low vs. USD But Fails to Secure Range SupportBreak
  • Tactical and Risk/Reward Considerations Argue Against Entering Short Trade for Now

The New Zealand Dollar dropped to the lowest level in two weeks against its US counterpart but failed to secure a confirmed breach of range support. Prices established a top marked by a bearish Dark Cloud Cover candlestick pattern but sellers have been unable to build downside follow-through despite heavy event risk by way of the FOMC and the RBNZ monetary policy announcements.

Immediate support remains at 0.6698, the October 21 low.A breakdown confirmed with a daily close below this barrier clears the way for a test of the 38.2% Fibonacci retracement at 0.6644. Alternatively, a move above range resistance at0.6792, the October 22 close, sees the next upside threshold at 0.6896, the October 15 high.

Tactical considerations argue against entering short for now. Positioning has yet to confirm that the pullback over recent weeks truly represents long-term down trend resumption rather than a correction in the context of a larger medium-term recovery. Furthermore, prices are too close to support to justify a trade from a risk/reward perspective. We will remain flat for now.

Losing Money Trading Forex? This Might Be Why.

NZD/USD Technical Analysis: Struggling to Build Momentum

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

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