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NZD/USD Technical Analysis: Six-Month Support Gives Way

NZD/USD Technical Analysis: Six-Month Support Gives Way

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Talking Points:

  • NZD/USD Technical Strategy: Flat
  • Kiwi Dollar has broken 6-month support vs. USD, hinting at deeper losses ahead
  • Short position activated, targeting an initial decline to test below the 0.68 figure

The New Zealand Dollar has broken support that has been holding it up since mid-May, hinting that deeper losses against the currency’s US namesake area ahead. The drop came amid broad-based risk aversion after US Special Counsel Robert Mueller subpoenaed the Trump campaign.

From here, a daily close below the 38.2% Fibonacci expansionat 0.6745 sees the next downside barrier marked by the 50% level at 0.6672. Alternatively, a turn back above the 23.6% Fib at 0.6835 – now recast as resistance – opens the door for a retest of the 14.6% expansion at 0.6890.

Technical and risk/reward parameters appeared acceptable to attempt a short position and NZD/USD was sold at 0.6804, initially targeting 0.6745. A stop-loss will be activated on a daily close above 0.6837. Profit on half of the trade will be booked at the stop moved to breakeven if (and when) the first objective is met.

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