NZD/USD Technical Strategy: FLAT
- New Zealand Dollar struggling for follow-through after breakout
- Signs of near-term RSI divergence hint bearish trend may resume
- Breakdown confirmation needed to re-establish NZD/USD short
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The New Zealand Dollar is struggling to find upside follow-through after breaking above resistance guiding the down move against its US counterpart since mid-April.
Prices are treading water ahead of support-turned-resistance in the 0.6688-0.6726 area, with a daily close above that opening the door to retest a chart inflection point at 0.6851. Alternatively, a move back below the former downtrend top – now in the 0.6531-80 zone – exposes September’s swing bottom at 0.6501.
Turning to the four-hour chart, early signs of negative RSI divergence hint at ebbing upside momentum as prices hover at upward-sloping support. That may precede a breakdown but confirmation needed for an actionable setup is still conspicuously absent.
Short NZD/USD exposure was unwound with a small loss after the break of daily chart resistance. Re-establishing the trade is a compelling proposition but doing so will require a clear-cut trigger on a break of immediate support. In the meantime, opting for a wait-and-see approach seems sensible.
NZD/USD TRADING RESOURCES:
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- Having trouble with your strategy? Here’s the #1 mistake that traders make
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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