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NZD/USD Technical Analysis: Short Trade Confirmation Sought

NZD/USD Technical Analysis: Short Trade Confirmation Sought

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Talking Points:

  • NZD/USD Technical Strategy: Flat
  • Kiwi Dollar attempting to break range bottom support once more
  • Reversal validation, acceptable risk/reward sought to enter short

The New Zealand Dollar is attempting to break below range support above the 0.67 figure against its US counterpart after re-testing a recently broken trend line. Prices have struggled to build downside momentum after seemingly overturning the upswing from January’s swing lows, but sellers seem intent on trying anew.

A daily close below the May 10 low at 0.6716 paves the way for a test of a horizontal pivot at 0.6576. Alternatively, a move back above trend line support-turned- resistance at 0.6779 opens the door for a challenge of the April 27 close at 0.6823.

Entering shortwould be consistent with expected 2016 fundamental themes but the absence of a validated support break makes taking a trade at current levels appear premature. A better-formed setup with adequate confirmation and acceptable risk/reward parameters will be sought before establishing exposure.

Losing money trading NZD/USD? This might be why.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.