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NZD/USD Technical Analysis: Eighth Down Day in the Works

NZD/USD Technical Analysis: Eighth Down Day in the Works

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Talking Points:

  • NZD/USD Technical Strategy: Flat
  • New Zealand Dollar Working on Eight Consecutive Down Day vs. US Namesake
  • Risk/Reward Skewed Against Short Trade as Prices Hover at Chart Support Level

The New Zealand Dollar is working on an eighth consecutive day of losses against its US namesake, touching levels unseen since November. Prices established a double top below the 0.69 figure having put in a Bearish Engulfing candlestick pattern and broken trend line support.

From here, a daily close below the76.4% Fibonacci expansion at 0.6525 paves the way for a test of the 0.6414-29 area, marked by 100% level and the November 18 low. Alternatively, a turn back above the 61.8% Fib at 0.6593opens the door for a challenge of the 50% expansion at 0.6649.

Prices are too close to near-term support to justify entering short from a risk/reward perspective. On the other hand, the absence of a defined bullish reversal signal warns against attempting to take up the long side. With that in mind, we will remain on the sidelines for the time being.

Losing Money Trading Forex? This Might Be Why.

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