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NZD/USD Technical Analysis: A Top in Place Above 0.68 Figure?

NZD/USD Technical Analysis: A Top in Place Above 0.68 Figure?

Ilya Spivak,
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NZD/USD Technical Strategy: BEARISH

  • NZ Dollarbounce stalls above 0.68, RSI hints upside momentum ebbing
  • Four-hour chart reveals break of January’s counter-trend support line
  • Sellers may initially target 0.6767 but deeper losses might well follow

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The New Zealand Dollar is struggling to continue pushing upward against its US counterpart after establishing a tenuous foothold above the 0.68 figure. Indeed, the appearance of negative RSI divergence now suggests that ebbing upside momentum may precede a reversal downward.

New Zealand Dollar vs US Dollar chart - daily

Shorter-term positioning bolsters the case for a bearish scenario. The four-hour chart shows prices have broken rising trend support guiding them higher since the beginning of the year following a retest of former resistance. This hints that recent gains were corrective in the context of the broader drop from early December.

New Zealand Dollar vs US Dollar chart - 4 hour

An initial move lower from here may see sellers eyeing a potential objective at 0.6767. If true downtrend resumption is on the menu however, that modest pullback will precede far deeper losses. A daily close above the January 15 high at 0.6849 would go a long way toward invalidating the setup.

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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