NZD/USD Technical Analysis: NZ Dollar Rejected at 2020 Trend Top?
NZD/USD Technical ANALYSIS: BEARISH
- New Zealand Dollar rebound rejected at 2020 downtrend resistance
- Downside extension would see initial support above the 0.58 figure
- Trader sentiment studies hint NZD/USD selling pressure building
The New Zealand Dollar appears to be trying to restart the downtrend prevailing against its US counterpart since the beginning of the year after rejection at resistance marking the move’s upper bound. An earlier attempt at bearish resumption two weeks ago failed to find follow-through but the subsequent recovery has likewise struggled to build lasting momentum.
Confirmation of a break below immediate resistance-turned-support at 0.6069 on a daily closing basis would likewise mark the breach of counter-trend support defining the upswing from the March 19 low. That may mean that a corrective upswing has run its course and the broader depreciation has resumed. Sellers then seem likely to challenge the April 3 swing low at 0.5844.
Establishing a foothold above falling trend line resistance seems like a prerequisite for neutralizing near-term selling pressure. Such a move would be promptly met with support-turned-resistance in the 0.6197-0.6245 zone. Overcoming that would likely put in play a series of back-to-back upside barriers running up toward the 0.65 figure, on route to the structural downtrend top set form July 2017.
NZD/USD TRADER SENTIMENT
Retail sentiment data shows 60.45%of traders are net-long, with the long-to-short ratio at 1.53 to 1. IG Client Sentiment(IGCS) is typically used as a contrarian indicator, soretail traders being net-long suggests that NZD/USD is biased downward. Furthermore, the net-long skew in open exposure has tilted further to the net-long side over the past week, hinting that selling pressure may become more acute ahead.
NZD/USD TRADING RESOURCES:
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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