NZD/USD Technical Analysis: Aiming to Test Below 0.72 Figure
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- NZD/USD Technical Strategy: Short at 0.7298
- Kiwi Dollar down to one-month low vs. US cousin after upbeat retail sales data
- Short position brought back to full size as prices take aim below the 0.72 figure
The New Zealand Dollar resumed the downtrend started in late July against its US cousin after a brief consolidative pause, hitting the lowest level in a month. Resumption was triggered after US retail sales data topped consensus forecasts, sending the greenback broadly higher (as expected).
From here, a daily close below the 50% Fibonacci retracement at 0.7188 opens the door for a test of the 61.8% level at 0.7101. Alternatively, a reversal back above the 38.2% Fib at 0.7276 sees the next upside barrier at 0.7384, marked by the 23.6% retracement.
Risk/reward parameters looked acceptable to scale back into a full-size NZD/USD short position having taken profit on half of exposure last week. The cumulative cost basis is now 0.7298. The initial objective is 0.7188 and a stop-loss will be activated on the entire trade on a daily close above 0.7276.
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