NZD/USD Technical ANALYSIS: BEARISH
- New Zealand Dollar testing three-year lows against US counterpart
- Break of support may set the stage for weakness into the 0.62 figure
- NZD/USD on the verge of breaking near-two-decade trend support
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The New Zealand Dollar sank to challenge the January 2016 low at 0.6348 against its US counterpart after clearing the October 2018 bottom at 0.6425, as expected. A further downward push sees the next major layer of support marked by four-year lows in the 0.6197-0.6245 area.
Alternatively, a rebound back above 0.6425 – now recast as resistance – sets the stage for a retest of the recently broken support shelf in the 0.6482-96 zone. Invalidating the overall bearish bias would require far steeper gains however: dominant trend resistance now hovers just below 0.68.
NZD/USD daily chart created using TradingView
Zooming out to the monthly chart, the latest downturn brings prices closer to confirming a break of support defining the NZD/USD uptrend for nearly two decades. Finishing August underneath it – a prospect now just a week away – would mark a major regime change and expose the 0.5914-0.6197 region.
NZD/USD monthly chart created using TradingView
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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