New Zealand Dollar Forecast: Kiwi Collapses- NZD/USD Breakdown Levels
New Zealand Dollar Technical Price Outlook: NZD/USD Weekly Trade Levels
- New Zealand Dollar updated technical trade levels - Weekly Chart
- NZD/USD collapses to fresh yearly lows – risk for further losses while below March open
- Initial support 6941/69, 6798 critical – Resistance 7110
The New Zealand Dollar plummeted more than 2.4% against the US Dollar into the start of the week with NZD/USD breaking to fresh 2021 lows. Kiwi is now down more than 6.8% off the yearly high with the decline now probing initial support objectives near the 2018 swing highs- we’re looking for possible inflection here with the broader risk weighted to the downside in the weeks ahead. These are the updated targets and invalidation levels that matter on the NZD/USD weekly price chart heading into next week. Review my latest Strategy Webinar for an in-depth breakdown of this Kiwitrade setup and more.
New Zealand Dollar Price Chart – NZD/USD Weekly
Notes: The New Zealand Dollar carved out a well-defined yearly opening-range just above a key technical confluence we’ve been following at 7111/52- a region defined by the 78.6% Fibonacci retracement of the 2017 decline and the 50% retracement of the broader 2014 decline. Ongoing momentum divergence into an RSI trigger break was followed by a decisive break / close below this threshold yesterday and has already fueled a decline of more than 4.6% off the March high.
The sell-off is now approaching initial weekly support and the 2019 / December 2018 swing highs at 6941/69 – look for possible inflection there IF reached with a close below needed to keep the short-bias viable towards the 69-handle and 6798. Weekly resistance now back at 7111/52 with breach above the objective March open at 7235 needed to shift the broader focus higher again.
Bottom line: The New Zealand Dollar remains susceptible to further losses in the weeks ahead after breaking below the yearly / monthly opening-range lows. That said, the decline has already extended into the first region of support into 6941/69. From a trading standpoint, a good zone to reduce short exposure / lower protective stops – recoveries should be limited by 7110 IF price is indeed heading lower with a break of the lows targeting longer-term uptrend support. 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
- A summary of IG Client Sentiment shows traders are net-long NZD/USD - the ratio stands at +1.07 (51.60% of traders are long) – neutral reading
- Long positions are 25.97% higher than yesterday and 50.97% higher from last week
- Short positions are 0.27% lower than yesterday and 18.75% 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.
Key New Zealand / US Economic Releases
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--- 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.