NZD/USD Technical Analysis: Down Trend May Be Resuming
To receive Ilya's analysis directly via email, please SIGN UP HERE
- NZD/USD Technical Strategy: Short at 0.7219
- Kiwi Dollar completes bearish Flag pattern, hinting at down trend resumption
- Sellers now look poised to challenge support below the 0.72 figure vs. US Dollar
The New Zealand Dollar has breached the bounds of a short-term corrective upswing, hinting that the downtrend started in late July against its US namesake is resuming. Prices briefly probed above the 0.73 figure as polling data saw the ruling National party extending its lead ahead of an election on September 23.
Near-term support is now at 0.7175, the 38.2% Fibonacci expansion, with a break below that on a daily closing basis opening the door for a test of the 0.7125-32 area (50% level, August 31 low). Alternatively, a turn above the 0.7237-41 zone (23.6% Fib, September 5 close) exposes the 38.2% Fib retracement at 0.7295.
The latest two-week upswing seems to have amounted to a bearish Flag pattern, as suspected. Risk/reward parameters appeared acceptable to re-enter short and a position has triggered at 0.7219, initially targeting 0.7175. A stop-loss will be activated on a daily close above 0.7241.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.