NZD/USD Technical Analysis: 2-Year Downtrend Top Under Fire
NZD/USD Technical ANALYSIS: BEARISH
- New Zealand Dollar testing two-year resistance against US namesake
- Confirmed break higher would mark tectonic change in prevailing bias
- Short-term poisoning warns that a rejection lower may be in the cards
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The New Zealand Dollar is testing resistance guiding the dominant downtrend against its US counterpart since July 2017. Confirmation of reversal would call on buyers to succeed in the arduous task of grinding through this barrier and securing a daily close above it. July’s swing top at 0.6791 would emerge as the first bit of subsequent resistance in such a scenario, followed by the triple top in the 0.6939-69 zone.
That is, unless the rally is rejected. Prices been rejected four times over the past two years from the upside barrier now before them. Subsequent downswings delivered losses ranging from 6.6 to 13.6 percent. The average decline comes to 9.8 percent. A daily close below rising trend line support running up from October lows is probably a prerequisite for confirming such a version of events.
Zooming to the four-hour chart, negative RSI seems to suggest ebbing upside momentum, implying that sellers might be proven to have the upper hand. An actionable trade setup is far from discernible at the moment however. Pulling back to challenge this month’s swing low at 0.6518 in a move that breaches the bounds of the latest upward leg from late November would be a start.
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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.