NZD/USD Technical Analysis: December High in the Crosshairs
NZD/USD Technical Strategy: NEUTRAL
- New Zealand Dollar eyeing December high after Fed-inspired rally
- Break upward opens the door for an advance above the 0.70 figure
- Confirmation, improved risk/reward sought before entering a trade
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A New Zealand Dollar is poised to challenge the December’s swing high at 0.6969 after punching through resistance in the 0.6849-84 area. The surge followed seemingly dovish FOMC policy announcement that weighed on the Greenback while boosting sentiment-geared assets, including the Kiwi unit.
From here, a break above immediate resistance confirmed on a daily closing basis opens the door for a test of the June 2018 swing top at 0.7060. Alternatively, a turn back below 0.6849 – now recast as support – sets the stage for a retest of the 0.6686-0.6713 zone.
Current positioning does not seem to offer a compelling trading opportunity. On one hand, prices are too close to immediate resistance to justify entering long from a risk/reward perspective. On the other, the absence of a bearish reversal signal hints taking up the short side is premature. Standing aside seems most prudent until a better-defined setup presents itself.
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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.