NZD/USD Technical Analysis: Candle Setup Hints at Downturn
To receive Ilya's analysis directly via email, please SIGN UP HERE
- NZD/USD Technical Strategy: Flat
- Bearish Kiwi Dollar chart pattern hints down trend may be resuming
- Proximity to support argues against re-entering short trade for now
The New Zealand Dollar put in a bearish Dark Cloud Cover candlestick pattern, hinting a turn lower against its US namesake may be ahead after a brief upswing. The setup has emerged after a retest of major trend line support-turned-resistance, seemingly bolstering the case for a bearish scenario.
Near-term support is at 0.7068, the 23.6% Fibonacci expansion, with a daily close below that opening the door for a test of the 38.2% level at 0.7005. Alternatively, a move back above the 0.7136-62 area (38.2% Fib retracement, trend line) paves the way for a challenge of the 50% threshold at 0.7187.
The second half of a short NZD/USD trade triggered at 0.7095 stopped out at breakeven amid recent gains after booking initial profit. Re-entering the position seems compelling but risk/reward considerations argue against it with prices squarely at support. Waiting on the sidelines seems most attractive for now.
See the schedule of upcoming webinars and join us LIVE to follow the financial markets!
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.