NZD/USD Technical Analysis: Six-Week Trend Line Broken
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- NZD/USD Technical Strategy: Flat
- Kiwi Dollar breaks near-term trend support, hinting at bearish reversal
- Risk./reward considerations argue against triggering short trade for now
The New Zealand Dollar broke rising trend support set from late July, hinting a downward trend reversal against its US counterpart may be in progress. Follow-through has been limited however, with sellers unable to produce meaningful momentum thus far.
Near-term support is at 0.7214, the 23.6% Fibonacci retracement, with a break below that on a daily closing basis opening the door for a test of the 38.2% level at 0.7111. Alternatively, a recovery above trend line support-turned-resistance at 0.7278 paves the way for a challenge of 0.7325, the July 12 high.
Prices are too close to immediate support to justify entering short from a risk/reward perspective. With that in mind, opting to remain on the sidelines appears prudent for the time being until the pair offers an actionable opportunity to establish exposure.