NZD/USD Technical Analysis: Trend Aims Lower Amid Congestion
NZD/USD Technical ANALYSIS: BEARISH
- New Zealand Dollar manages to defend its six-week uptrend
- Longer-term chart setup still favoring a broadly bearish bias
- Daily close below 0.6322 may mark downtrend resumption
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The New Zealand Dollar is idling above support in the 0.6322-34 area. Last week’s would-be bearish breakout failed to find follow-through, with NZD/USD recoiling back into a now-familiar range containing price action since mid-October.
Immediate support-turned-resistance is in the 0.6425-41 zone. A push above that is swiftly met by a similar barrier in the 0.6482-96 region. Breaking above the latter boundary with confirmation on a daily closing basis seems like prerequisite for longer-lasting gains.
The dominant trend bias is likely to remain bearish even in this scenario however. Neutralizing that probably requires breaching trend resistance set from July 2017, now just below the 0.68 figure. Piercing below 0.6322 would violate the bounds of the upswing from October lows, marking downtrend resumption.
Zooming out to the monthly chart for a look at broader-based positioning helps explain current indecision. NZD/USD is sitting squarely atop a 16-year price inflection area centered around the 0.60 figure. A struggle for conviction at such a potent threshold seems entirely within reason.
Nevertheless, the overall bias appears to favor weakness here as well. The Kiwi Dollar cleared two-decade support in August, setting the stage for what looks like a tectonic downside pivot. Offsetting those cues likely demands clawing back above 0.6970.
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.