NZD/USD Technical Analysis: Stalling at Trend Line Support
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- NZD/USD Technical Strategy: Flat
- New Zealand Dollar treading water at four-month trend support
- Looking to FOMC, RBNZ for a break in dead-locked positioning
The New Zealand Dollar declined against its US namesake as expected after the pair put in a Bearish Engulfing candlestick pattern. A larger reversal has failed to gain traction thus far however, with prices stalling at a support line that has defined the uptrend since late May.
From here, a daily close below the August 30 swing bottom at 0.7204 opens the door for a test of a horizontal pivot level at 0.7102. Alternatively, a push above the 14.6% Fibonacci expansion at 0.7353 paves the way for a challenge of the 0.7426-50 area (23.6% level, September 7 close).
Inconclusive positioning argues against taking a trade at current levels. Furthermore, on-coming event risk by way of the FOMC and RBNZ monetary policy announcements threatens to spark dramatic volatility and materially change the setup. With that in mind, opting for the sidelines seems prudent for now.
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