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NZD/USD Technical Analysis: Uptrend Break Seeks Follow-Through

NZD/USD Technical Analysis: Uptrend Break Seeks Follow-Through

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Talking Points:

  • NZD/USD Technical Strategy: Flat
  • Kiwi Dollar struggling to extend lower after would-be uptrend break
  • Improved risk/reward settings needed for actionable short trade setup

The New Zealand Dollar is struggling to build downside momentum after seeming breaking the bounds of the upswing launched from mid-May lows. Still, overall positioning suggests that the choppy bearish trend defining price action since early September 2016 may be resuming.

Near-term support is in the 0.7259-63 area (14.6% Fibonacci expansion, former resistance). A break below that on a daily closing basis opens the door for a test of the 0.7208-15 zone (chart inflection point, 23.6% level). Alternatively, a push above the June 30 high at 0.7347 exposes a double top at 0.7382.

Current positioning does not seem to offer an actionable trading opportunity. Most critically from a practical perspective, prices are too close to near-term support to justify entering short on risk/reward grounds. With that in mind, opting for the sidelines seems appropriate for now.

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.