NZD/USD Technical Analysis: Resistance from 2014 Broken
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- NZD/USD Technical Strategy: Flat
- New Zealand Dollar breaks resistance from July 2014, warning of key reversal
- Staying on the sidelines as narrow breakout conflicts with fundamental outlook
The New Zealand Dollar narrowly edged above resistance limiting gains against its US counterpartsince July 2014, warning that a significant breakout may be in progress. The nearby presence of other near-term technical resistance levels warn that seeking further confirmation is be prudent.
A daily close above the 38.2% Fibonacci expansion at 0.6699 opens the door for a test of the 50% level at 0.6746. Alternatively, a drop back below the trend line and the 23.6% Fib at 0.6640 paves the way for a challenge of the February 16 low at 0.6545.
Our 2016 fundamental outlook envisions continuation of the long-term NZD/USD down trend. With that in mind, an apparent break of critical resistance is hard to ignore. With that in mind, we will stand aside and wait for greater clarity to emerge before committing to open trade exposure.
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