NZD/USD Technical Analysis: Looking to Sell Above 0.68
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- NZD/USD Technical Strategy: Pending Short at 0.6825
- Trend Line Break Follows Bearish Engulfing Candle, Hinting Double Top in Place
- Entry Order to Sell NZ Dollar vs. US Counterpart Established Above 0.68 Figure
The New Zealand Dollar looks to have set a double top below the 0.69 figure against its US namesake after putting in a Bearish Engulfing candlestick pattern. The case for a larger downward reversal is made stronger by a break through rising trend line support set from mid-November.
From here, a break below the December 18 low at 0.6681 on a daily closing basis opens the door for a challenge of a horizontal pivot at 0.6619. Alternatively, a reversal above trend line support-turned-resistance, now at 0.6798, paves the way for a test of the newly-established double top in the 0.6883-97 area.
We are keen to enter short NZD/USD in line with the long-term down trend but prices are too close to support to justify taking the trade at market on risk/reward grounds. With that in mind, we will set an entry order to sell the pair at 0.6825. If triggered, the position will initially target 0.6681 and carry a stop-loss activated on a daily close above 0.6897.
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