NZD/USD Technical Analysis: NZ Dollar Set to Test Below 0.60?
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NZD/USD Technical ANALYSIS: BEARISH
- New Zealand Dollar six-week uptrend broken, sellers poised to lead
- Another challenge of 4-year lows near 0.62 figure looks likely ahead
- Downtrend dynamics hint a drop toward 0.60 level may be brewing
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The New Zealand Dollar appears to be resuming the downward trend against its US namesake after rejection at resistance in the 0.6425-41 area. Prices have broken below rising trend support guiding the rise from early October lows, signaling that a six-week corrective upswing has run its course.
From here, sellers appear poised to challenge the August-September 2015 bottom in the 0.6197-0.6268 zone once again. If the next leg of the structural down move falls broadly in line with the trend average, a decline of 7-9 percent over the coming 3-5 months might be in the cards.
Daily NZD/USD chart created using TradingView
That would put prices near the 0.60 figure, amounting to the weakest level in over a decade. That would put them within a hair of breaching the lower bound of a chart inflection zone in play since March 2003, at 0.5914. Breaking that threshold leaves relatively few barriers remaining along the way to the 0.50 figure.
Monthly NZD/USD chart created using TradingView
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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.