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NZD/USD Technical Analysis: Topping Near 0.68 Figure?

NZD/USD Technical Analysis: Topping Near 0.68 Figure?

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Talking Points:

  • NZD/USD Technical Strategy: Flat
  • Shooting Star Candlestick, Negative RSI Divergence Hint Prices May be Topping
  • Looking for Clear-Cut Confirmation of Bearish Reversal to Enter Short Position

The New Zealand Dollar put in a Shooting Star candlestick, hinting at indecision following an upswing that could mark the beginning of a bearish reversal. Negative RSI divergence points to ebbing upside momentum and reinforces the case for a down move.

Near-term support is at the intersection of a rising trend line and a horizontal pivot at 0.6617, with a break below that opening the door for a challenge of another recently significant inflection point at 0.6509. Alternatively, a daily close above the December 4 high at 0.6787 sees the next key upside boundary at 0.6896, the October 15 top. This threshold is reinforced by a falling trend line set from July 2014.

A Shooting Star candlestick and negative RSI divergence amount to tangential clues of on-coming weakness and require confirmation to be actionable. With that in mind, we will remain on the sidelines for the time being and wait for the setup to produce a better defined selling opportunity.

Losing Money Trading Forex? This Might Be Why.

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