NZD/USD Technical Strategy: SHORT AT 0.7319
- New Zealand Dollar testing key support marked by February swing bottom
- Confirmed breakdown to open the door for a drop to the lowest in 2 months
- Partial profit booked on short position after prices met the initial objective
The New Zealand Dollar is pressuring key support above the 0.71 figure against its US counterpart, with a conclusive break opening the door for a drop to two-month lows. Prices have carved out a near-term down trend after establishing a double top below the 0.75 threshold, as expected.
From here, a daily close below the February 8 bottom at 0.7177 opens the door for a challenge of the 50% Fibonacci retracement at 0.7109. Alternatively, a breach of the 23.6% Fib at 0.7282 would negate the immediate bearish bias and expose the 14.6% expansion at 0.7341 once again.
The short NZD/USD trade triggered at 0.7319 hit its initial objective and profit has been booked on half of open exposure. The rest remains in play, looking to take advantage of any follow-on weakness. The stop-loss has been trailed to the breakeven level (0.7319).
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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