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NZD/USD Technical Analysis: Upside Breakout in the Works?

NZD/USD Technical Analysis: Upside Breakout in the Works?

Ilya Spivak, Head Strategist, APAC

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Talking Points:

  • NZD/USD Technical Strategy: Flat
  • Kiwi Dollar poised to break near-term down trend vs. US counterpart
  • Confirmation of an actionable trade setup seems lacking for now

The New Zealand Dollar is poised to break above the confines of a down trend that has guided the currency lower since early November against its US namesake. A breakout would point to further gains but leave the broader long-term bearish intact, at least for the time being.

A daily close above the 0.71 figure, marked by the intersection of a falling trend line and the 38.2% Fibonacci retracement, opens the door for a test of the 50% level at 0.7172. Alternatively, a reversal below resistance-turned-support at 0.7043 sees the next downside barrier at 0.6945.

An actionable trade setup is absent at this point. On one hand, a breach of resistance is yet to be firmly established. On the other, the absence of a clear-cut bearish reversal signal warns against attempting to fade recent gains. Opting to stand aside seems most prudent for now until greater clarity emerges.

Are retail traders buying or selling NZD/USD and what does it mean for the trend? Find out here !

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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