NZD/USD Technical Analysis: Down Trend Ready to Resume?
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NZD/USD Technical ANALYSIS: BEARISH
- Doji candles at resistance hint New Zealand Dollar rebound may be done
- Near-term positioning warns against over-extrapolating on-coming selloff
- Clean-cut break of digestion range floor needed to confirm bearish intent
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The New Zealand Dollar raced higher after recoiling from support defined by the August-September 2015 bottom. The rebound seems to have hit a wall on a retest of support-turned-resistance in the 0.6425-41 area marked by the October 2018 swing bottom, with back-to-back Doji candlesticks warning of indecision. That hints at a loss of upside momentum and warns that a turn lower might be ahead.
NZD/USD daily chart created using TradingView
Zooming into the four-hour chart to size up more immediate positioning warns against extrapolating imminent downside follow-through however. The bounds of the near-term uptrend appear to have been broken, but subsequent range-bound consolidation is yet to offer meaningful indication that a reversal rather than resumption is due to follow.
NZD/USD 4-hour chart created using TradingView
Breaking below the 0.6392-0.6409 price inflection zone would be a good start toward making the argument that sellers have reclaimed the initiative. A minor hurdle at 0.6359 follows thereafter, ahead of a run toward testing September’s swing bottom. Alternatively, a push beyond range resistance at 0.6445 sets the stage to retest former support clustered around the 0.65 figure.
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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.