NZD/USD Technical Analysis: Double Top Forming Below 0.70?
NZD/USD Technical Strategy: NEUTRAL
- Bearish Engulfing candlestick pattern hints Kiwi Dollar top is forming
- Reversal confirmation needs break of trend support from January low
- Breakdown would initially expose support region near the 0.67 figure
See our free trading guide to help build confidence in your NZD/USD trading strategy!
A New Zealand Dollar put in a Bearish Engulfing candlestick pattern on a test of resistance in the 0.6942-69 area, hinting that a move lower is ahead. A break below rising trend line support set from early January – now at 0.6842 – sets the stage for a decline to challenge the 0.6686-0.6713 zone.
Alternatively, a breach above resistance validated on a daily closing basis initially exposes the June 2018 swing top at 0.7060. This is followed by a more formidable upside barrier marking former range floor support in the 0.0.7174-88 region.
Confirmation of a bearish reversal – specifically, a clear breach of the near-term series of higher highs and lows – is still pending. That makes taking a short position at current levels appear to be premature. Opting for the sidelines appears to be most prudent until a better-defined opportunity presents itself.
NZD/USD TRADING RESOURCES:
- Just getting started? See our beginners’ guide for FX traders
- Having trouble with your strategy? Here’s the #1 mistake that traders make
- Join a free Trading Q&A webinar and have your questions answered
--- 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.