NZD/USD Technical Analysis: 10-Month Resistance Under Fire
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- NZD/USD Technical Strategy: Flat
- Kiwi Dollar poised to test 10-month high below 0.75 level vs. US cousin
- Confirmation, improved risk/reward setting needed for actionable setup
The New Zealand continues to gain ground on its US cousin, with prices now poised to challenge resistance that has capped gains since September 2016. The currency’s resilience even in the face of disappointing economic data seemingly speaks to strong conviction behind the upside push.
Confirmation of a break above 0.7404 (November 8 high, 38.2% Fibonacci expansion) on a daily closing basis opens the door for a test of the 0.7466-84 area (50% level, September 2016 high). Alternatively, a reversal below resistance-turned-support at 0.7347 exposes the chart pivot level at 0.7259.
An actionable trading opportunity seems absent. Prices are testing resistance but a clear break is yet to be shown, making a long trade seem premature. The absence of a bearish reversal signal clearly argues against betting on the short side. On balance, the sidelines seem most attractive.