NZD/USD Technical Analysis: Upside Breakout Fizzles
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- NZD/USD Technical Strategy: Flat
- New Zealand Dollar fails to build upside momentum after would-be breakout
- Waiting for short trade opportunity to sell in line with long-term down trend
The New Zealand Dollar has failed to build lasting upside momentum against its US namesake after breaking resistance at a falling trend line set from July 2014. The dominant long-term trend continues to favor the downside, painting the recent upswing as corrective.
From here, a break above the February 5 high at 0.6749 on a daily closing basis broadly opens the door for a test of a major double top in the 0.6883-97 area. Alternatively, a move below near-term rising trend line support at 0.6621 clears the way for a challenge of the 38.2% Fibonacci expansion at 0.6545.
We expect the NZD/USD down trend started in mid-2014to continue, in line with our 2016 fundamental outlook. An actionable short trade setup is absent amid choppy, inconclusive positioning however. With that in mind, we will remain on the sidelines and wait for a compelling selling opportunity to present itself.
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