NZD/USD Technical Analysis: Down Trend Back in Play?
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- NZD/USD Technical Strategy: Flat
- Kiwi Dollar breaks rising near-term support, hinting down trend back in play
- Choppy positioning argues against short trade absent clear invalidation point
The New Zealand Dollar broke guiding price higher over the past month, hinting that the medium-term down trend started in late July may be resuming. The boundaries of the long-term advance initiated in August 2018 remain intact and have not been challenge since mid-May.
The next layer of significant support lines up at 0.7132, the August 31 low, with a break below that on a daily closing basis opening the door for a retest of former resistance at 0.7054. Alternatively, a push back above the just-broken countertrend line, now at 0.7242, broadly exposes the September 20 close at 0.7355.
Entering short seems somewhat compelling from a purely technical perspective but risk/reward considerations warn against taking the trade. Specifically, an acceptable invalidation point to place a stop-loss given a would-be target at 0.7132 is not apparent. With that in mind, opting to remain flat appears to be most prudent.
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