NZD/USD Technical Analysis: Two-Month Uptrend Broken
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- NZD/USD Technical Strategy: Flat
- New Zealand Dollar breaks 2-month uptrend, hints at deeper losses ahead
- Waiting to enter short trade as FOMC rate decision threatens positioning
The New Zealand Dollar may have turned a corner against its US counterpart after prices broke support guiding the move higher since late January. Prices established a top near the 0.68 figure with the formation of a bearish Evening Star candlestick pattern last week.
Near-term support is now at 0.6551, the 50% Fibonacci expansion, with a break below that on a daily closing basis opening the door for a challenge of the 61.8% level at 0.6488. Alternatively, a reversal back above the 38.2% Fib 0.6614 paves the way for a re-test of trend line support-turned-resistance, now at 0.6650.
We are keen to enter short NZD/USD in line with our 2016 fundamental forecast. However, the available trading range is too narrow relative to recent volatility to justify a trade from a risk/reward perspective. Furthermore, the Kiwi’s sensitivity to sentiment trends warns that positioning may be disrupted by the on-coming FOMC policy announcement. We will continue to stand aside for now.
Losing money trading NZD/USD? This might be why.
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