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NZD/USD Technical Analysis: Facing Critical Resistance

NZD/USD Technical Analysis: Facing Critical Resistance

Daniel Dubrovsky, Strategist

NZD/USD Talking Points:

  • The New Zealand Dollar is slowly making progress to the upside after a bullish reversal pattern
  • Ahead, NZD/USD faces critical resistance around 0.7404 followed by the September 2017 high
  • If prices turn lower, 0.7308 could end up as near-term support followed by the 14.6% minor Fib

Just getting started trading the New Zealand Dollar? See our beginners’ guide for FX traders to learn how you can apply this in your strategy!

The New Zealand Dollar continues to make progress to the upside against its US counterpart as expected. NZD/USD has pushed higher after it formed a falling wedge bullish reversal pattern. However, progress higher has been a bit slow as it approaches key near-term resistance. That is the 38.2% Fibonacci extension around 0.7404.

It should be noted that this area is the place where NZD/USD got stuck under when it tried to close above it late-January and mid-February. If the pair is unable to push above near-term resistance, then there could be the potential of a triple top bearish reversal pattern to form. In addition, beyond that lies 0.7437 which is the September 2017 high and horizontal resistance.

A break above that line exposes the 50% midpoint at 0.7482. On the other hand, if prices turn lower the 23.6% extension could stand in the way as near-term support. A push below that exposes the 14.6% minor level at 0.7249. Keep in mind that the upper line of the falling wedge could come back as former resistance new support.

NZD/USD Trading Resources:

--- Written by Daniel Dubrovsky, Junior Currency Analyst for DailyFX.com

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