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NZD/USD Technical Analysis: NZ Dollar Price Trend Aims Lower

NZD/USD Technical Analysis: NZ Dollar Price Trend Aims Lower

Ilya Spivak, Head Strategist, APAC

NZD/USD Technical ANALYSIS: BEARISH

  • New Zealand Dollar remains locked in now-familiar near 0.61 figure
  • Overall chart positioning still favoring a bearish NZD/USD outlook
  • Trade sentiment studies hint selling pressure may be strengthening

The New Zealand Dollar continues to hover below trend line resistance defining the decline against its US counterpart since the beginning of the year. Neutralizing near-term selling pressure probably requires a daily close above a cluster of back-to-back resistance levels culminating in the 0.6192-0.6245 zone.

From there, the door may open for a challenge of another dense resistance cluster starting just below the 0.64 figure and extending up into a downward-sloping barrier establishing the structural NZD/USD decline since July 2017. A daily close above that barrier would suggest a lasting bullish trend reversal.

Immediate support is marked by the lower bound of a rising channel in play since late March (now at 0.5971). Securing a foothold below that exposes the subsequent layer of support at 0.5670. A further push beyond that puts the 2020 low at 0.5470 in the crosshairs.

NZD/USD Technical Analysis: NZ Dollar Price Trend Aims Lower

NZD/USD daily chart created using TradingView

NZD/USD TRADER SENTIMENT

Retail sentiment data shows 56.65%of traders are net-long, with the long-to-short ratio at 1.31 to 1. IG Client Sentiment (IGCS) is typically used as a contrarian indicator, sothis positioning tilt suggests that NZD/USD is aiming lower. Furthermore, the net-long skew has grown compared with yesterday and last week. This seemingly makes for a stronger NZD/USD-bearish bias.

NZD/USD Technical Analysis: NZ Dollar Price Trend Aims Lower

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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