NZD/USD Technical Analysis: Next Leg of Down Trend Starting?
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- NZD/USD Technical Strategy: Short at 0.7090
- Kiwi Dollar range support break exposes March swing low
- Short trade scaled up to full size as down trend re-accelerates
The New Zealand Dollar may be preparing to re-accelerate downward for a challenge of lows established in early March against its US counterpart. Prices appear to have cleared the bottom of their near-term digestion range, paving the way for resumption of the downtrend begun in early February.
From here, a daily close below the 0.6890-0.6905 area (March 9 low, 38.2% Fibonacci expansion) opens the door for a test of the 0.6847-62 zone (50% level, December 23 low). Alternatively, a reversal above the 0.6975-0.7005 region (23.6% Fib, trend line) exposes the 38.2% Fib retracement at 0.7076.
Partial profit was taken on a NZDUSD position activated at 0.7205. The next leg lower may now be getting underway and the trade has been scaled back up to full size at 0.6974, bringing the cumulative cost basis to 0.7090. Exposure will be cut in half again upon hitting the next downside target at 0.6905. A stop-loss on the full trade will be activated on a daily close above 0.7005.
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