NZD/USD Technical ANALYSIS: BEARISH
- New Zealand Dollar recoils from resistance, drops back to near-term support
- Break downward would set the stage to revisit four-year lows near 0.62 figure
- Neutralizing selling pressure likely requires close above trend line from 2017
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The New Zealand Dollar floundered at resistance in the 0.6425-41 area against its US counterpart once more. The pair almost made good on the bullish implications of a Head and Shoulders bottom carved out in the month from mid-September, but sellers rejuvenated sellers stepped in to reject the rally.
NZD/USD now sits squarely on support guiding its ascent from October lows. A daily close below 0.6338 would open the door for a retest of the August-September 2015 bottom in the 0.6197-0.6268 zone. It would also make a forceful argument for the resumption of the longer-term downtrend.
Neutralizing selling pressure looks arduous. Prices would need to clear back-to-back resistance running up through 0.6496, landing them at three-month highs. They would then face the bounds of the downtrend from July 2017. Breaching that seems like a prerequisite for lasting gains.
Daily NZD/USD chart created using TradingView
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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