NZD/USD Technical Analysis: Topping Signs Emerge Sub-0.72
To receive Ilya's analysis directly via email, please SIGN UP HERE
- NZD/USD Technical Strategy: Flat
- Bearish candlestick pattern hints New Zealand Dollar top may be taking shape
- Adverse risk/reward setup, lacking confirmation argue against taking short trade
The New Zealand Dollar may be carving out a top against its US namesake after prices produced a bearish Dark Cloud Cover candlestick pattern. High-profile fundamental event risk threatens to trigger volatility and may materially alter technical positioning in the days ahead however.
Near-term support is at 0.7029, the 50% Fibonacci expansion, with a break below that opening the door for a test of the 38.2% level at 0.6945. Alternatively, a breach of the 61.8% Fib at 0.7112 confirmed on a daily closing basis paves the way for a challenge of the 76.4% expansion at 0.7215.
Positioning does not offer an actionable trading opportunity. First, prices are too close to support to justify entering short from a risk/reward perspective. Further, the series of higher highs and lows set from late May remains intact, calling for further confirmation before selling. Staying on the sidelines seems prudent.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.