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NZD/USD Technical Analysis: False Breakout Below 0.73 Figure?

NZD/USD Technical Analysis: False Breakout Below 0.73 Figure?

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Talking Points:

  • NZD/USD Technical Strategy: Flat
  • Kiwi Dollar breaks key trend resistance, hinting at further gains ahead
  • Negative RSI divergence warns against chasing prices higher however

The New Zealand Dollar appears poised to continue building higher against its US namesake after breaking resistance capping prices since late July 2017. Early signs of negative RSI divergence warn that upside momentum may be fading however, with a reversal downward possibly to follow.

From here, a turn back below the 50% Fibonacci retracement at 0.7170 would break the near-term uptrend and open the door for a retest of the 38.2% level at 0.7077. Alternatively, a push above the 61.8% Fib at 0.7261 paves the way for a challenge of the 76.4% retracement at 0.7375.

Positioning is conflicted, with the falling trend line break and momentum studies standing in opposition to each other. With that in mind, opting to remain on the sidelines seems most prudent until a better-defined trading opportunity presents itself.

Need help building confidence in your NZD/USD strategy? See our guide here !

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