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

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

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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.

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