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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.
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