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NZD/USD Technical Analysis: NZ Dollar Downtrend in Jeopardy

NZD/USD Technical Analysis: NZ Dollar Downtrend in Jeopardy

Ilya Spivak, Head Strategist, APAC

NZD/USD Technical ANALYSIS: BEARISH

  • New Zealand Dollar continues to pressure 2020 downtrend vs USD
  • Shorter-term positioning hints sellers attempting to reassert control
  • Trader sentiment studies cautiously arguing for a bullish trend bias

The New Zealand Dollar is idling below resistance guiding the 2020 decent against its US counterpart. Prices have stalled here after rebounding from the late March swing low under the 0.55 figure thanks to the Fed’s efforts at defusing a would-be credit crisis.

A breach of trend line resistance confirmed on a daily closing basis looks likely to set the stage for a retest of former support in the 0.6197-0.6245 zone. Alternatively, a push through the outer layer of immediate support is at 0.5911 eyes barriers at 0.5844 and 0.5670 along the way to the March bottom at 0.5470.

New Zealand Dollar vs US Dollar price chart - daily

NZD/USD daily chart created using TradingView

Zooming in to thefour-hour chart seems to suggest sellers are trying to take the upper hand. Prices broke immediate rising trend support, hinting that a run at the range floor just above 0.59 may be ahead. A break below that seems to put the next downside barrier at 0.5841. Resistance is in the 0.6069-75 zone.

NZD/USD Technical Analysis: NZ Dollar Downtrend in Jeopardy

NZD/USD 4-hour chart created using TradingView

NZD/USD TRADER SENTIMENT

Retail sentiment data shows 53.86% of traders are net-long, with the short-to-long ratio at 1.17 to 1. IG Client Sentiment (IGCS) is typically used as a contrarian indicator, sothe current positioning skew suggests that NZD/USD is biased higher. The narrow gap between longs and shorts makes for a timid signal however.

New Zealand Dollar vs US Dollar exchange rate, trader sentiment

See the full IGCS sentiment report here.

NZD/USD TRADING RESOURCES:

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

To contact Ilya, use the comments section below or @IlyaSpivak on Twitter

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

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