NZD/USD Technical Analysis: Familiar Trend Resistance Holds
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- NZD/USD Technical Strategy: Flat
- Prices Recoil from 6-Week Trend Line Resistance, Hinting at Down Trend Resumption
- Waiting for Attractive Short Setup as Risk/Reward Considerations Skewed Against Entry
The New Zealand Dollar turned lower against its US counterpart after testing falling trend line resistance guiding the move lower over the past six weeks. The pair put in a Shooting Star candlestick following a test of the 0.66 figure, hinting at ebbing upside momentum, and is now working on securing confirmation of reversal.
Near-term support is at 0.6495, the 23.6% Fibonacci expansion. A break below that on a daily closing basis sees the next downside barrier at 0.6427, the 38.2% level. Alternatively, a push above trend line resistance – now at 0.6567 – clears the way for a test of the 38.2% Fib retracement at 0.6607.
We are keen to re-enter a short position in line with the dominant down trend in play since July 2014. Prices are too close to support to justify pulling the trigger now from a risk/reward perspective. With that in mind, we will remain on the sidelines for the time beingand wait for a more attractive setup to emerge.
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