NZD/USD Technical Analysis: Down Trend Ready to Resume?
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- NZD/USD Technical Strategy: Flat
- Kiwi Dollar may be topping after retesting major trend line barrier
- Confirmation, passing of event risk needed for actionable trade setup
The New Zealand Dollar may be preparing to turn lower against its US counterpart after retesting the underside of a support level broken in November 2016. Negative RSI divergence hints at ebbing upside momentum and may precede a turn lower, ending the upswing from late-December lows.
Near-term support is at 0.7255, the 23.6% Fibonacci retracement, with a daily close below that opening the door for a test of the 38.2% level at 0.7180. Alternatively, a push above the 23.6% Fib expansion at 0.7358 sees the next upside barrier in the 0.7403-29 area (November 8 high, 38.2% expansion).
RSI divergence is an insufficient indication of reversal by itself and requires further confirmation to make for an actionable short trade setup. Furthermore, the on-coming RBNZ rate decision represents critical event risk that may materially alter positioning. With that in mind, opting to stand aside for now seems prudent.
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