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NZD/USD Technical Analysis: A Top in Place After 0.72 Test?

NZD/USD Technical Analysis: A Top in Place After 0.72 Test?

2017-06-02 11:53:00
Ilya Spivak, Sr. Currency Strategist
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Talking Points:

  • NZD/USD Technical Strategy: Flat
  • Kiwi Dollar sets up bearish reversal signal after test of 0.72
  • Confirmation of reversal needed for actionable trade setup

The New Zealand Dollar put in a bearish Evening Star candlestick pattern following a test of the 0.71 figure against its US counterpart, hinting a downturn may be ahead. Negative RSI divergence points to ebbing upside momentum and bolsters the case for a reversal.

Near-term support is at 0.7041, the 14.6% Fibonacci expansion, with a break below that on a daily closing basis paving the way for a test of the 23.6% level at 0.6991. Alternatively, push above the 50% Fib retracement at 0.7097 sees the next upside hurdle at 0.7163, the 61.8% mark.

It seems prudent to wait for further confirmation of reversal before taking up the short side. The short-term series of higher highs and lows remains intact and hefty fundamental event risk looms ahead. With that in mind, staying on the sidelines seems wise for now.

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NZD/USD Technical Analysis: A Top in Place After 0.72 Test?

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