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NZD/USD Technical Analysis: Down Trend May Be Resuming

NZD/USD Technical Analysis: Down Trend May Be Resuming

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Talking Points:

  • 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.

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.