NZD/USD Technical Analysis: Rally Fades, 18-Year Support at Risk
NZD/USD Technical Strategy: BEARISH
- NZ Dollardeclines for five consecutive days, stalls above 0.67 figure
- Break of counter-trend support line hints bearish trend has resumed
- January lows in focus if sellers can manage daily close below 0.6686
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A New Zealand Dollar upswing triggered by better-than-expected local CPI data was conspicuously rejected at trend line resistance guiding the move lower since early December. Sellers now look poised to challenge support in the 0.6686-0.6713 area again, with a break below that exposing the 0.6592-0.6619 zone.
Trend line resistance is now at 0.6817. A reversal above that confirmed on a daily closing basis may neutralize near-term selling pressure and open the door for a test of the 0.6849-84 region. That is followed by the December 4 swing high at 0.6969.
On balance, the path of least resistance still looks to favor the downside, with overall positioning pointing to resumption of the April-October 2018 decline following a corrective rise over the subsequent two months. If oncoming weakness takes prices below 18-year trend support, a structural reversal may be confirmed.
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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.