NZD/USD Technical Strategy: FLAT
- New Zealand Dollar poised to test above 0.68 after breaking resistance
- Support now just below 0.67, reversal to see first major barrier at 0.65
- Opting against long trade on US midterm election, RBNZ rate decision
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The New Zealand Dollar looks poised to probe above the 0.68 figure against its US counterpart having bottomed above the 0.64 mark, as expected. A breach above resistance in the 0.6688-0.6726 area builds on last week’s break of downtrend resistance set from mid-April, exposing 0.6851 next.
Alternatively, a reversal back below 0.6688 – now recast as support – confirmed on a daily closing basis opens the door for a retest of minor resistance-turned-support in the 0.6592-0.6619 zone. This followed by a more substantive barrier at the 0.65 figure.
While the technical picture seems to suggest scope for further upside and risk/reward parameters on a long position seem acceptable, the proximity of heavy-duty event risk warns against taking the trade. US midterm elections may substantially alter the landscape and an RBNZ rate decision is on tap.
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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