NZD/USD Technical Strategy: BEARISH
- NZ Dollar rebound capped at near-term trend line resistance
- Close below 0.6591 may put prices on a path to larger selloff
- Neutralizing selling pressure likely needs break above 0.6727
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The New Zealand Dollar may be preparing to resume the near-term downtrend against its US counterpart. Prices are recoiling from resistance guiding the move lower form the March swing top, weighed down by disappointing employment data.
Sellers are now eyeing familiar support in the 0.6591-0.6619 area. A break below this barrier confirmed on a daily closing basis opens the door for a test of the 0.65 figure. October’s swing bottom at 0.6425 follows shortly thereafter, with a break below that implying that the longer-term decline has been re-engaged.
Immediate resistance is in the 0.6699-0.6727 zone. This is marked by the confluence of trend line resistance and a congestion zone that has acted as both a top- and bottom-side barrier since June 2018. A break above that – likewise confirmed with a daily close – would probably neutralize immediate selling pressure.
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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