NZD/USD Technical Analysis: Support Below 0.68 in Focus
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- NZD/USD Technical Strategy: Flat
- Kiwi Dollar may be forming a double top below 0.71 vs. US counterpart
- Looking for greater confirmation of reversal to re-enter short position
The New Zealand Dollar turned sharply lower after re-testing resistance below the 0.76 figure, putting in the largest daily decline in eight months. Positioning suggests that a bearish Double Top chart pattern may be emerging, pointing to deeper losses against the Kiwi’s US counterpart.
Near-term support is at 0.6784, the 38.2% Fibonacci retracement, with a break below that on a daily closing basis opening the door for a test of the 50% level at 0.6701. Alternatively, a reversal above support-turned-resistance at 0.6924 paves the way for a challenge of the 0.7054-77 area (April 19 high, 38.2% Fib expansion).
Recent attempts to enter short NZD/USD in similar territory have met with limited success, with seesawing price action and lackluster follow-through ultimately producing flat results. With that in mind, a more convincing setup – perhaps with confirmation on a break of 0.6784 – will be sought to re-enter the trade.
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