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NZD/USD Technical Analysis: Sinking to 2-Month Low

NZD/USD Technical Analysis: Sinking to 2-Month Low

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Talking Points:

  • NZD/USD Technical Strategy: Flat
  • New Zealand Dollar working on 7th consecutive decline vs. US counterpart
  • Chart setup, risk/reward parameters argue against a trade at current levels

The New Zealand Dollar declined against its US namesake as expected, sinking to the lowest level in nearly two months as sellers attempt to breach the 0.70 figure. Prices are working on their seventh consecutive decline, which would make for the longest losing streak since early January.

A daily close below the June 15 low at 0.6963 opens the door for a challenge of the 61.8% Fibonacci retracement at 0.6923. Alternatively, a reversal back above the 38.2% level at 0.7077 paves the way for a retest of the 23.6% Fib at 0.7171.

Taking a trade seems unattractive at this stage. On one hand, prices are too close to support to justify entering short from a risk/reward perspective. On the other, the absence of a defined bullish reversal signal hints taking up the long side is premature. It seems prudent to stand aside until something better-defined emerges.

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

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