NZD/USD Technical Analysis: Turn Lower in the Works Below 0.74?
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- NZD/USD Technical Strategy: Flat
- Kiwi Dollar chart positioning reveals signs of topping below 0.74 figure
- Confirmation needed before an actionable short trade setup is revealed
New Zealand Dollar technical positioning hints prices may be preparing to turn lower after rising to the highest level in four months against its US counterpart. Negative RSI divergence hints that upside momentum may be fading, which might precede the formation of a top and break of uptrend launched in December.
From here, a daily close below support at 0.7261 (61.8% Fibonacci retracement, trend line) opens the door for a retest of the 50% level at 0.7170. Alternatively, a push above the 76.4% Fib at 0.7375 paves the way for a challenge of the September 20 swing high at 0.7434.
Entering a short trade seems premature for now. The immediate trend continues to be defined by a series of higher highs and lows and RSI divergence need not necessarily result in a reversal, so further confirmation is needed. In the meantime, standing aside appears to be prudent.
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