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