NZD/USD Technical Analysis: Break of August Low Exposes 0.64
NZD/USD Technical Strategy: SHORT AT 0.6630
- New Zealand Dollar breaks August swing low, hints two-year low
- Deeper losses expected, next layer of support just above 0.64 mark
- NZD/USD short trade scaled up, expecting downside continuation
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The New Zealand Dollar looks vulnerable to deeper losses against its US counterpart after breaking below Augusts’ swing bottom to hit a two-year low. The broader price trend has been by a series of lower highs and lows since mid-April, when a top was established near the 0.74 figure.
From here, sellers are taking aim at support marked by the 38.2% Fibonacci expansion at 0.6402. A daily close below that opens the door for a test of the 50% level at 0.6302. Alternatively, a move back above the 0.6545-60 area exposes trend resistance in the 0.6605-54 zone.
The short NZD/USD position activated at 0.6680 has been scaled up after Augusts’ bottom gave way. The overall cost basis for the trade is now 0.6630. A stop-loss will be activated on a discretionary basis, although a close above trend resistance would go a long way toward invalidating the dominant bearish bias.
NZD/USD TRADING RESOURCES:
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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.