NZD/USD Technical Analysis: NZ Dollar Down Trend Ready to Resume?
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NZD/USD Technical Strategy: FLAT
- New Zealand Dollar bounce capped at trend-defining resistance
- Shooting Star candle hints at exhaustion, may precede reversal
- Countertrend line break sought as confirmation to trigger short
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The New Zealand Dollar rebounded against its US counterpart as expected but the dominant down trend may be getting ready to resume. The appearance of a daily Shooting Star candlestick at resistance guiding the pair lower since mid-April speaks to indecision, which may precede a bearish reversal.
A turn lower from here sees initial support at 0.6545, the August 15 low. A break below that confirmed on a daily closing basis targets the 38.2% Fibonacci expansion at 0.6396. Alternatively, a push above the 0.6688-0.6726 area exposes the 0.6851-70 zone (May 16 low, 38.2% Fib retracement).
Turning to the four-hour chart, entering short looks premature. While the near-term ascent has stalled, the series of higher highs and lows set from Augusts’ swing low remains intact. A convincing breach of support overturning this move is needed as confirmation to make for an actionable short trade setup.
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.