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Talking Points:
- NZD/USD Technical Strategy: Flat
- New Zealand Dollar trying to break above range resistance vs. US Dollar
- Waiting for sell signal to short in line with dominant long-term trend bias
The New Zealand Dollar is attempting to break above congestion range resistance that has capped the upside against the currency’s US counterpart for a month. Prices have erased early-week losses following a round of soft economic data, with buyers working on a fifth consecutive advance.
A daily close above the February 26 high at 0.6775 opens the door for a test of double top resistance in the 0.6883-97 area. Alternatively, a reversal below the 38.2% Fibonacci expansion at 0.6570 paves the way for a challenge of the 50% level at 0.6507.
Our 2016 fundamental outlook calls for the dominant NZD/USD trend to continue. That paints any on-coming upside momentum as corrective. We will wait for the move to run its course and look to enter short once an actionable bearish reversal signal emerges.
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