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