NZD/USD Technical Analysis: Trying to Make Good on Trend Break
To receive Ilya's analysis directly via email, please SIGN UP HERE
- NZD/USD Technical Strategy: Short at 0.7265
- Kiwi Dollar accelerates lower after breaking uptrend from mid-May lows
- Short position triggered, eyeing a return to test support above 0.72 figure
The New Zealand is attempting to make good on a break of rising trend support guiding the currency higher since mid-May against its US counterpart. Prices accelerated lower having struggled to find immediate downside follow-through after the government announced an NZ$1 billion housing fund.
From here, a daily close below the 0.7208-15 area (support shelf, 23.6% Fibonacci expansion) opens the door for a test of the 38.2% level at 0.7134. Alternatively, a push above the 0.7259-81 zone (former support, 14.6% Fib, trend line) paves the way for another challenge of the June 30 high at 0.7347.
An upswing against a backdrop of broad-based US Dollar weakness following cautious testimony from Fed Chair Yellen has improved risk/reward parameters and a short trade has been entered at 0.7265. The initial target is 0.7215, with a stop-loss to be activated on a daily close above 0.7284. Profit on half of open exposure will be booked and the stop moved to breakeven when the first objective is met.