NZD/USD Technical Analysis: NZ Dollar Downtrend Ready to Resume?
NZD/USD Technical Strategy: FLAT
- Negative RSI divergence hints at Kiwi Dollar downtrend resumption
- Break below 0.65 figure to expose October swing bottom once again
- 4-hour countertrend support eyed as bearish confirmation threshold
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The New Zealand Dollar may be preparing to resume the downward trend against its US counterpart following a corrective recovery. Prices rose after putting in a bullish Morning Star candlestick pattern, as expected. Now, negative RSI divergence at trend resistance hints a top is taking shape.
Initial support is at 0.6501, with a break below that opening the door for another test of October’s swing bottom at 0.6425. Alternatively, a daily close above trend resistance at 0.6590 would invalidate the near-term bearish bias and expose support-turned-resistance in the 0.6688-0.6726 area.
Confirmation of reversal is needed to make for an actionable short trade. A break below counter-trend support on the four-hour chart – now in the 0.6542-60 area – would go a long way in that direction. In the meantime, opting to stand aside seems most prudent.
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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.