NZD/USD Technical Analysis: Down Trend Ready to Resume?
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- NZD/USD Technical Strategy: Flat
- Kiwi produces Shooting Star candlestick, hinting at downturn
- Waiting for confirmation of reversal to establish short position
The New Zealand Dollar produced a Shooting Star candlestick on a test of a trend-defining chart barrier, hinting a turn lower against its US namesake may be ahead. A turn lower here would paint the past two weeks of gains as corrective and mark hint at resumption of a longer-term bearish trend reversal.
A daily close below the 38.2% Fibonacci retracement at 0.7136 opens the door for a test of the 23.6% level at 0.7073. Alternatively, a push above the intersection of trend line support-turned-resistance and the 50% Fib at 0.7187 paves the way for a challenge of the 61.8% retracement at 0.7238.
The Shooting Star candlestick is indicative of indecision and does not amount to an actionable bearish reversal signal without further confirmation. With that in mind, opting for the sidelines seems prudent until the par offers a more actionable trading opportunity.
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