NZD/USD Technical Analysis: Reversal Confirmation Pending
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- NZD/USD Technical Strategy: Flat
- Kiwi Dollar reversal stalls between competing technical barriers
- Waiting for breakdown confirmation to establish short position
The New Zealand Dollar may have carved out a double top below the 0.71 figure against its US namesake but clear-cut confirmation has proved challenging. Prices are wedged between competing versions of trend line support defining the upswing from mid-January.
Near-term resistance is in the 0.6823-42 area, marked by a horizontal pivot and one of the aforementioned trend lines, with a break above that on a daily closing basis targeting another pivot at 0.6926. Alternatively, a reversal below the 0.6716-50 zone, the May 10 low and the other version of the trend line, opens the door for a challenge of an axis level at 0.6576.
While entering short is a compelling proposition given expected 2016 fundamental themes, inconclusive positioning argues against pulling the trigger on a trade at current levels. A better-defined opportunity will be sought once prices offer more convincing evidence of a bearish reversal in progress.
Losing money trading NZD/USD? This might be why.