NZD/USD Technical Analysis: Triple Top Forming Below 0.70 Figure?
NZD/USD Technical Strategy: NEUTRAL
- NZ Dollar may be forming a Triple Top below the 0.70 figure
- Practical short trade setup probably needs a break below 0.67
- Near-term bearish cues invalidated on a close above 0.6969
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The New Zealand Dollar is back to retest familiar resistance in the 0.6942-69 area against its US counterpart. This barrier has capped the upside since early December 2018. Early signs of negative RSI divergence warn of ebbing upside momentum, which may precede the formation of a Triple Top.
Near-term support is marked by a rising trend line set from early March, now at 0.6869. A break below that confirmed on a daily closing basis opens the door for a test of longer-term trend line support in play since early October, now at 0.6745. This is immediately followed by support in the 0.6700-20 zone.
On balance, this probably means that in practice, a break below the 0.67 figure will be needed for both appropriate confirmation as well as acceptable risk/reward parameters to enter a short position. The next layer of support beyond that looks to be in the 0.6591-0.6619 region.
Alternatively, a daily close above 0.6969 would neutralize bearish overtones in near-term positioning and set the stage for a test of the January high at 0.7060. This is followed by heartier barrier 0.7174-88 band, marked by a former range floor.
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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.