NZD/USD Technical Analysis: Double Top May Be Set Below 0.75
NZD/USD Technical Strategy: SHORT AT 0.7319
- New Zealand Dollar aiming lower after breaking near-term trend support
- Overall positioning hints a double top may be forming above the 0.74 mark
- Short trade in play, initially looking for a test of the 23.6% Fib expansion
The New Zealand Dollar recoiled from familiar resistance above the 0.74 figure against its US counterpart, hinting that a double top may be in the works. Prices conspicuously traded through the series of higher highs and lows set from early February, hinting at deeper near-term losses on the horizon.
Near-term support is at 0.7254, the 23.6% Fibonacci expansion. A break below that confirmed on a daily closing basis opens the door for a challenge of the 0.7140-77 area (38.2% level, February 8 low). Alternatively, a push above trend line resistance at 0.7334 exposes the 0.7434-37 double top for another test.
Last week, the bearish chart setup was reinforced by attractive risk/reward parameters and a short NZD/USD position was activated at 0.7319. The trade initially targets 0.7254, with a stop-loss set to be triggered on a daily close above 0.7359. Profit on half of exposure will be booked if the first objective is met.
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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