NZD/USD Technical Analysis: Foothold Above 0.69 Reclaimed
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- NZD/USD Technical Strategy: Flat
- New Zealand Dollar rallies most in four months vs. US namesake
- Looking for actionable setup to short in line with long-term trend
The New Zealand Dollar launched sharply higher against its US namesake, with prices issuing the largest daily advance in four months. The move played out against a backdrop of broad-based USD weakness following a deeply disappointing outcome on May’s employment figures.
Near-term resistance is at 0.6945, the 38.2% Fibonacci expansion, with a break above that opening the door for a test of the 0.7029-54 area marked by the 50% level and the April 19 high. Alternatively, a move below the 23.6% Fib at 0.6842 paves the way for a challenge of the 14.6% expansion at 0.6778.
Expected 2016 fundamental trends favor a bearish NZD/USD bias. The absence of an actionable bearish reversal signal argues against taking a short trade at present however. Furthermore, the approaching RBNZ monetary policy announcement may markedly alter current positioning. Staying on the sidelines seems prudent for the time being.
Losing money trading NZD/USD? This might be why.
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