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NZD/USD Technical Analysis: Waiting for RBNZ to Offer Clarity

NZD/USD Technical Analysis: Waiting for RBNZ to Offer Clarity

Ilya Spivak, Head Strategist, APAC

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Talking Points:

  • NZD/USD Technical Strategy: Flat
  • Kiwi Dollar Find a Top After H&S Pattern Marks the Start of an Upswing, as Expected
  • Positioning Inconclusive Amid Conflicting Technical Cues, Looming RBNZ Event Risk

The New Zealand Dollar move higher as expected after completing a bullish Head and Shoulders bottom chart formation, hitting a six-week high just below the 0.68 figure. Prices have now pulled back to toward near-term trend support as the RBNZ policy announcement looms ahead.

Near-term support is in the 0.6590-0.6617 area, bracketed by a rising trend line set from the November 18 low and a horizontal pivot in play since mid-October as well as reinforced by the 38.2% Fibonacci expansion. A daily close below this boundary clears the way for a challenge of the 50% level at 0.6554. Alternatively, a move above support-turned-resistance at 0.6677, the 23.6% Fib, opens the door for a test of the December 4 high at 0.6787.

Positioning is inconclusive at this point. The near-term uptrend remains intact absent a breach of trend line support but the dominant medium- to long-term bias favors weakness. This paints recent gains as a correction representing a selling opportunity. Entering short here lacks confirmation and proximity to support robs the setup of acceptable risk/reward parameters. High-profile event risk on the horizon only complicates the situation. As such, we remain flat.

Losing Money Trading Forex? This Might Be Why.

NZD/USD Technical Analysis: Waiting for RBNZ to Offer Clarity

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

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