NZD/USD Technical Analysis: Five-Month Resistance at Risk
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- NZD/USD Technical Strategy: Flat
- New Zealand Dollar on pace to break five-month trend line resistance
- Move higher seen as corrective despite forceful upside momentum
The New Zealand Dollar is soaring against its US counterpart, with prices poised to clear resistance capping gains since mid-October 2015. The aggressive push higher follows comments from Fed Chair Janet Yellen that traders perceived as diminishing scope for on-coming interest rate hikes.
A daily close above the 50% Fibonacci expansion at 0.6932 paves the way for a test of the 61.8% level at 0.6994, and subsequently the 0.70 figure. Alternatively, move back below the 38.2% Fib at 0.6869 sees the next downside barrier at 0.6793, the 23.6% expansion.
While the momentum behind the upward push has been undeniably impressive, we continue to expect gains to prove corrective in the context of a larger down trend in line with our 2016 fundamental forecast. With that in mind, we will remain on the sidelines for now and wait for a selling opportunity to emerge once the upswing fizzles.
FXCM traders are net-long NZD/USD.Find out what this means for the trend going forward!
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