NZD/USD Technical Analysis: Down Trend Ready to Resume?
NZD/USD Technical Strategy: FLAT
- NZ Dollar rejected at 3-month channel top resistance once again
- Entering short premature while near-term uptrend remains valid
- Long side bias requires break of resistance above the 0.74 figure
The New Zealand Dollar is retreating from resistance defining the down move since late January but confirmation of a lasting down move is still absent. The near-term trend continues to be defined by a series of higher highs and lows, hinting the immediate path of least resistance favors the upside.
From here, a daily close below rising channel support at 0.7293 opens the door for a test of the 23.6% Fibonacci expansion at 0.7254. This is followed by a more series barrier at the intersection of the channel floor and the 38.2% level at 0.7140.
Alternatively, a move above the channel’s upper boundary – now at 0.7392 – paves the way for another challenge of long-standing resistance at 0.7434 (September 2017 high). If this too is breached, the July 2107 swing top at 0.7558 comes into the spotlight.
Final profit was booked on the short NZD/USD trade activated at 0.7320 and the position was closed. Re-entering on the short side seems premature as prices sit squarely above near-term support while getting long is unattractive in the context of overall positioning. On balance, staying flat seems most prudent.
NZD/USD TRADING RESOURCES
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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