NZD/USD Technical Analysis: Six-Month Trend Resistance Under Fire
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
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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.
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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.