NZD/USD Technical Strategy: FLAT
- NZ Dollar rebounds as expected but dominant down trend still intact
- Critical resistance now just above 0.66, support is at the 0.65 figure
- Bearish reversal signal or clear-cut breakout needed for trade setup
See our free trading guide to help build confidence in your NZD/USD trading strategy!
The New Zealand Dollar rebounded against its US counterpart after putting in a bullish Morning Star candlestick pattern, as expected. Prices now aim to challenge the outer layer of bearish trend resistance guiding them downward since mid-April.
Confirmation of a break on a daily close above this barrier – now at 0.6613 – opens the door for a challenge of support-turned-resistance in the 0.6688-0.6726 area. Alternatively, a move back near-term support at 0.6501 paves the way for a retest of the October 8 low at 0.6425.
On balance, the dominant downtrend remains intact for now and prices are too close to resistance to make even a tactical long trade seem attractive. Taking up the short side seems premature absent a clear-cut bearish reversal signal capping recent gains however. Standing aside seems most prudent for now.
NZD/USD TRADING RESOURCES:
- Just getting started? See our beginners’ guide for FX traders
- Having trouble with your strategy? Here’s the #1 mistake that traders make
- Join a free Trading Q&A webinar and have your questions answered
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
To contact Ilya, use the Comments section below or @IlyaSpivak on Twitter