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NZD/USD Technical Analysis: Kiwi Dollar Back on the Offensive

NZD/USD Technical Analysis: Kiwi Dollar Back on the Offensive

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Talking Points:

  • NZD/USD Technical Strategy: Flat
  • Kiwi Dollar invalidates down trend resumption signal, probes back above 0.73
  • Current positioning doesn’t seem to offer actionable long or short trade setup

The New Zealand Dollar invalidated would-be a down trend resumption signal to try its luck above 0.73 against its US counterpart once more. Recent gains may yet prove to be corrective, but sellers have struggled to sustain momentum ahead of the upcoming general election on September 23.

From here, a daily close above the 50% Fibonacci retracement at 0.7345 opens the door for a challenge of the 61.8% level at 0.7396. Alternatively, a reversal back below the 38.2% Fib at 0.7295 paves the way for a retest of the 0.7184-0.7226 area (September 14 low and close).

The short NZD/USD trade activated at 0.7219 has been stopped out. Prices are now too close to resistance to make entering long viable from a risk/reward perspective while the absence of a clear-cut bearish reversal signal argues against re-entering short. On balance, that makes the sidelines seem most attractive.

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