NZD/USD Technical ANALYSIS: BEARISH
- NZ Dollar neutralizes topping signs, rises to six-month high
- Trend-defining resistance set from July 2017 now pressured
- Longer-term positioning continues to project a bearish bias
The New Zealand Dollar overturned would-be signs of topping noted earlier in the week, powering upward to the highest level in six months against its US counterpart. The currency now looks poised to challenge the outer bound of the dominant downtrend defining price action since July 2017.
A daily close above this barrier – now at 0.6729 – would suggest that the underlying bearish bias to the recent trajectory of the NZD/USD exchange rate has been neutralized. Immediate resistance would follow at 0.6791 but the next truly significant test of buyers’ mettle comes in the 0.6939-69 zone.
Defusing immediate upward pressure appears to initially demand a move below the December 13 swing high at 0.6636. That would also breach the bounds of the uptrend from late-November lows. From there, pushing below a support bloc extending down to 0.6425 would speak to longer-term bearish resumption.
NZD/USD daily chart created using TradingView
Zooming out to the monthly chart for a broader view suggests sellers still hold the upper hand. Recent gains appear corrective following a break of support defining a nearly 20-year NZD/USD uptrend. The case for lasting gains seems suspect unless that breach is conclusively reversed.
NZD/USD monthly chart created using TradingView
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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