NZD/USD Technical ANALYSIS: BEARISH
- New Zealand Dollar recoils from resistance, eyeing 4-year bottom
- Back-to-back support levels hinting at a grind on route below 0.62
- Longer-term technical setup still argues for a broadly bearish bias
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The New Zealand Dollar fell after a brisk rebound lost momentum on a retest of support-turned-resistance in the 0.6425-41 area, as expected. The subsequent selloff has brought prices within striking distance of major support marked by the August-September 2015 bottom in the 0.6197-6268 area.
This barrier is reinforced by Fibonacci expansion levels at 0.6252 and 0.6190. A daily close below the latter level initially exposes the 61.8% Fib at 0.6129. Alternatively, a turn back above the 23.6% expansion at 0.6328 puts resistance in the 0.6425-41 zone back in focus.
Daily NZD/USD chart created using TradingView
While sellers seem to have their work cut out for them as back-to-back support levels threaten to stymie progress, longer-term positioning still argues for a decidedly bearish bias. The monthly chart reveals NZD/USD finished August with a break of support guiding it higher for nearly two decades.
That speaks to a structural, tectonic pivot in favor of the downside. A formidable barrier looks to be clustered around the 0.60 figure and will need to be reckoned with. Beyond that however, there seem to be relatively few barriers on route below the 0.50 mark to test the 2009 post-Great Recession low.
Monthly NZD/USD chart created using TradingView
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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