NZD/USD Technical Analysis: Kiwi Nearing Three-Week Low
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- NZD/USD Technical Strategy: Short at 0.7205
- Kiwi Dollar sinks to near-three week low vs. US cousin
- Short position activated as prices test above 0.72 figure
The New Zealand Dollar turned downward against its US cousin as expected retesting trend line support-turned-resistance set from January 2016. The move followed a dovish RBNZ monetary policy announcement, as our fundamental outlook suggested might be the case.
From here, a daily close below the 38.2% Fibonacci expansion at 0.7138 opens the door for a challenge of the 50% level at 0.7064. Alternatively, a reversal back above the 0.7229-39 area (23.6% Fib, December 14 high) paves the way for a retest of trend line resistance, now at 0.7356.
An intraday uptick above the 0.72 figure offered window to enter short with acceptable risk/reward parameters and the trade has been activated at 0.7205. A stop-loss will be triggered on a daily close above 0.7239. Profit on half of the position will be booked and the stop-loss trailed to breakeven if prices hit 0.7138.
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