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NZD/USD Technical Analysis: Rally Fades, 18-Year Support at Risk

NZD/USD Technical Analysis: Rally Fades, 18-Year Support at Risk

Ilya Spivak,
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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.

New Zealand Dollar vs US Dollar daily chart

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.

New Zealand Dollar vs US Dollar monthly chart

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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