We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bearish
Oil - US Crude
Mixed
Wall Street
Bullish
Gold
Mixed
GBP/USD
Bearish
USD/JPY
Bearish
More View more
Breaking news

Federal Reserve Announce $2.3 Trillion in Loans to Support Economy

New Zealand Dollar Price Outlook: Kiwi Plunges Through Support

New Zealand Dollar Price Outlook: Kiwi Plunges Through Support

2020-02-28 15:00:00
Michael Boutros, Strategist
Share:

New Zealand Dollar Technical Price Outlook: NZD/USD Weekly Trade Levels

The New Zealand Dollar is the worst performing currency against the US Dollar among the USD Majors with Kiwi breaking below multi-year slope support into the close of February trade. Growing concerns about the Coronavirus have continued to weigh on market sentiment with stocks posting the largest single-day drop in history yesterday – accordingly, the currency comm bloc has remained under pressure. These are the updated targets and invalidation levels that matter on the NZD/USD weekly price chart. Review my latest Strategy Webinar for an in-depth breakdown of this Kiwitrade setup and more.

Starts in:
Live now:
Apr 13
( 12:04 GMT )
Live Weekly Strategy Webinars on Mondays at 12:30GMT
Weekly Scalping Webinar
Register for webinar
Join now
Webinar has ended

New Zealand Dollar Price Chart – NZD/USD Weekly

New Zealand Dollar Price Chart - NZD/USD Weekly - Kiwi Trade Outlook - Technical Forecast

Chart Prepared by Michael Boutros, Technical Strategist; NZD/USD on Tradingview

Notes: In my last New Zealand Dollar Weekly Price Outlook we noted that Kiwi had reversed off, “long-term down-trend resistance and the immediate focus is on this pullback.” A sustained decline off that high has fueled a loss of more than 7.5% year-to-date with Kiwi posting just one weekly advance since the start of 2019.

This week’s sell-off takes NZD/USD below confluence support at 6314/22 - a region defined by the 2019 low-week close and the 78.6% retracement of the September advance. Note that the lower parallel of the ascending pitchfork formation also converges on this zone and further highlights the technical significance of this break- look for resistance there now with a break lower from here exposing the 1.618% extension / 2015 & 2019 lows at (6197-6204). A close below is needed to fuel the next leg lower in the New Zealand Dollar with such a scenario eyeing subsequent support objectives at 6023 and the 2006 low at 5928. Broader bearish invalidation steady at the 2018 low close at 6436.

Forex for Beginners
Forex for Beginners
Recommended by Michael Boutros
New to Forex Trading? Get started with this Beginners Guide
Get My Guide

Bottom line: The New Zealand Dollar has broken below confluence support and leaves the risk weighted to the downside in NZD/USD while below this week’s high. From a trading standpoint, a good idea to reduce short-exposure / lower protective stop on a test of the 62-handle – look for a reaction there for guidance IF reached with close below needed to keep the immediate short-bias viable. I’ll publish an updated New Zealand Dollar Price Outlook once we get further clarity on the near-term NZD/USD technical trade levels.

For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy

New Zealand Dollar Trader Sentiment – NZD/USD Price Chart

New Zealand Dollar Trader Sentiment - NZD/USD Price Chart - Kiwi Trade Outlook - Technical Forecast
  • A summary of IG Client Sentiment shows traders are net-long NZD/USD - the ratio stands at +2.65 (72.61% of traders are long) – bearish reading
  • Long positions are5.38% lower than yesterday and 2.93% higher from last week
  • Short positions are 11.52% lower than yesterday and 33.64% lower from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests NZD/USD prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current positioning and recent changes gives us a stronger NZD/USD-bearish contrarian trading bias from a sentiment standpoint.
NZD/USD MIXED
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily -10% -4% -8%
Weekly 39% -40% -8%
Learn how shifts in Kiwi retail positioning impact trend
Get My Guide

Key New Zealand / US Economic Releases

New Zealand / US Economic Releases - Key Data - NZD/USD Event Risk

Economic Calendar - latest economic developments and upcoming event risk.

Previous Weekly Technical Charts

--- Written by Michael Boutros, Technical Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.