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NZD/USD Technical Analysis: Longest Loss Streak in 5 Months

NZD/USD Technical Analysis: Longest Loss Streak in 5 Months

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Talking Points:

  • NZD/USD Technical Strategy: Flat
  • New Zealand Dollar Down Move vs. US Counterpart Extends for 5th Day Straight
  • Opting to Pass on Short Position for Now, Waiting for Better Risk/Reward Setup

The New Zealand Dollar fell for a fifth consecutive day against its US counterpart, making for the longest losing streak in five months. Prices established a double top with the appearance of a Bearish Engulfing candlestick pattern, confirmed on a break ofa rising trend line set from mid-November.

Near-term support is at 0.6593, the 61.8% Fibonacci expansion, with a break below that on a daily closing basis opening the door for a challenge of the 76.4% level at 0.6525. Alternatively, a reversal above the 50% Fib at 0.6649 paves the way for a test of the 38.2% expansion at 0.6704.

At 56 pips, the available trading range appears to be too narrow to justify taking a trade given an ATR readingin excess of 70 and our preference for stop-losses triggered on a daily close. With that in mind, we will remain on the sidelines for the time being and wait for a more attractive opportunity to present itself. Our previous short entry order has been removed.

Losing Money Trading Forex? This Might Be Why.

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