NZD/USD Technical Analysis: Pivotal Trend Line in Focus
To receive Ilya's analysis directly via email, please SIGN UP HERE
- NZD/USD Technical Strategy: Flat
- Kiwi Dollar puts in largest 2-day rally in a month vs. US counterpart
- Waiting for defined reversal signal at trend line barrier to enter short
The New Zealand Dollar corrected sharply higher against its US counterpart, putting in the largest two-day advance in a month. Prices are retesting rising trend line support-turned-resistance set from the lows established in mid-January, apparently probing to determine if the recent bearish breakdown has the wherewithal for follow-through.
A daily close above the intersection of the trend line and the 38.2% Fibonacci retracement at 0.6820 opens the door for a challenge of the 50% level at 0.6865. Alternatively, a reversal back below the 23.6% Fib at 0.6765 clears the way for another test of the May 30 low at 0.6675.
A short NZD/USD position seems compelling given expected 2016 fundamental trends and the recent upswing seems to offer an attractive opportunity to establish exposure. Still, the absence of a defined bearish reversal signal robs the setup of required confirmation. With that in mind, the sidelines appear narrowly more compelling at this time.
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.