NZD/USD Technical Analysis: 2016 Uptrend May Be Broken
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- NZD/USD Technical Strategy: Short at 0.7095
- New Zealand Dollar breaks 10-month rising trend line support
- Short trade triggered below 0.71, aiming for October swing low
The New Zealand Dollar broke through support at a rising trend line guiding the currency higher against its US counterpart since the beginning of the year. The breach suggests that a longer-term trend reversal may be in progress against a backdrop of swelling Fed rate hike bets.
Near-term support is now at 0.7035, the October 13 low. A daily close below this barrier exposes the 0.6952-63 area (100% Fibonacci expansion, June 15 low). Alternatively, a move back above the 61.8% level at 0.7124 opens the door for a retest of the 50% Fib at 0.7177.
The combination of a major technical break and acceptable risk/reward parameters has led to the activation of a short position at 0.7095. The trade initially targets 0.7035 and carries a stop-loss activated on a daily close above 0.7124. Half of profits will be booked and the stop moved to breakeven when the first objective is reached.
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