NZD/USD Technical Analysis: Down Trend May Be Resuming
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- NZD/USD Technical Strategy: Flat
- Kiwi Dollar producers bearish reversal signal at critical trend resistance
- Confirmation of uptrend breach needed for actionable short trade setup
The New Zealand Dollar may be readying to turn lower as prices produce a Bearish Engulfing candlestick pattern at trend resistance capping the upside since September. A turn lower from here would mark continuation of a longer-term down trend triggered by a bearish breakout in mid-November.
A daily close below the 14.6% Fibonacci expansion at 0.7222 opens the door for a challenge of the 23.6% level at 0.7166. Alternatively, a breach above trend line resistance – now at 0.7293 – sees the next major upside barrier marked by the November 8 high at 0.7403.
While the bearish implications of current positioning seem compelling, confirmation of a downturn remains absent without a clear breach of the series of higher highs and lows set from late-December lows. With that in mind, it seems wise to wait for greater clarity before committing to exposure.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.