NZD/USD Technical Analysis: Down Trend Back in Play
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- NZD/USD Technical Strategy: Flat
- Kiwi Dollar down trend resumes after congestion range support break
- Risk/reward, positioning considerations argue against taking up trade
The New Zealand Dollar broke through congestion range support and looks to have resumed the down trend started in early February against its US counterpart. The currency has now sunk to challenge levels unseen in almost 11 months
A daily close below the 50% Fibonacci expansion at 0.6847 opens the door for a challenge of the 61.8% level at 0.6790. Alternatively, a reversal back above the resistance cluster in the 0.6890-0.6918 area (March 9 low, 38.2% Fib, trend line) paves the way for a test of the 23.6% expansion at 0.6975.
Prices are too close to immediate support to justify entering a short position from a risk/reward perspective. Furthermore, a compelling trade structure – particularly, a clear invalidation point – seems absent. With that in mind, opting the sidelines seems most prudent.
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