NZD/USD Technical Analysis: Five-Month Down Trend Broken
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- NZD/USD Technical Strategy: Flat
- Kiwi Dollar poised to continue higher as prices test resistance below 0.71
- Confirmation needed before an actionable trade opportunity presents itself
The New Zealand Dollar looks poised to continue building higher after rising to the highest level in over two months against its US counterpart. Prices overcame downward trend resistance set from late July and the fundamental backdrop looks conducive to an upside bias as the calendar turns to 2018.
A break of resistance marked by the 38.2% Fibonacci retracement at 0.7078 confirmed on a daily closing basis opens the door for a challenge of the 50% level at 0.7170. Pivotal support is in the 0.6964-80 area (23.6% Fib, November 9 high), with a turn back below that exposing former resistance at 0.6911 for a retest.
Current positioning doesn’t seem to offer an actionable trade setup. A break of resistance needs to be confirmed to make entering long viable from a risk/reward perspective while the absence of a bearish reversal signal warns against taking up the short side. On balance, opting to stand aside appears to be prudent.
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