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NZD/USD Technical Analysis: Struggling to Build on Upside Break

NZD/USD Technical Analysis: Struggling to Build on Upside Break

Ilya Spivak, Head Strategist, APAC

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

See our free trading guide to help build confidence in your NZD/USD trading strategy!

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.

New Zealand Dollar vs US Dollar chart - daily

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.

New Zealand Dollar vs US Dollar

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:

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

To contact Ilya, use the Comments section below or @IlyaSpivak on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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