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New Zealand Dollar Outlook: NZD/USD Grinds at Resistance- Kiwi Levels

New Zealand Dollar Outlook: NZD/USD Grinds at Resistance- Kiwi Levels

Michael Boutros, Strategist

New Zealand Dollar Technical Price Outlook: NZD/USD Near-term Trade Levels

  • New Zealand Dollar updated technical trade levels - Daily & Intraday Charts
  • NZD/USD August rally falters into trend resistance
  • Risk for pullback while below 7147 – Constructive above 7032
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The New Zealand Dollar is fractionally lower against the US Dollar since the start of the week with NZD/USD trading just below the weekly open into the close on Wednesday. A rally of more than 5.3% off the August low saw Kiwi turn from trend resistance last week and the focus is on this near-term consolidation just below. These are the updated targets and invalidation levels that matter on the NZD/USD technical charts. Review my latest Strategy Webinar for an in-depth breakdown of this Kiwitrade setup and more.

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New Zealand Dollar Price Chart – NZD/USD Daily

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

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

Technical Outlook: In my last New Zealand Dollar Price Outlook we noted that the Kiwi rally was approaching topside resistance and to, “look to reduce long-exposure / raise protective stops on a stretch into 7093-7121.” NZD/USD briefly registered an intraday high at 7170 before turning lower last week with price contracting into broader downtrend resistance for the last few days- is the long-side exhausting here?

Initial support rests with the 100-day moving average / 23.6% Fibonacci retracement of the August advance at 7074/84 with key support at the September-open / 38.2% retracement at 7032/40- a break / close below this threshold would be needed to mark resumption of the broader downtrend. A topside breach above the high-day close at 7148 would likely fuel another accelerated rally with such a scenario exposing critical resistance at the objective yearly open / 61.8% retracement of the yearly range at 7189/13.

New Zealand Dollar Price Chart – NZD/USD 240min

New Zealand Dollar Price Chart - NZD/USD 240min - Kiwi Trade Outlook - Technical Forecast

Notes: A closer look at Kiwi price action shows NZD/USD continuing to trade within the ascending pitchfork formation extending off the August lows last week’s rally faltering just ahead of the upper parallel. The weekly opening-range is preserved heading into Thursday – look to the break for guidance with broader outlook constructive while above 7032/40.

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Bottom line: Kiwi turned off near-term uptrend / longer-term downtrend resistance last week with the weekly opening-range intact just below. From a trading standpoint, look for an exhaustion low ahead of the median-line IF price is indeed heading higher with a breach above 7213 ultimately needed to suggest a larger trend reversal may be underway. Review my latest New Zealand Dollar Price Outlook for a closer look at the longer-term NZD/USD weekly technical trading 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 Retail Positioning - Technical Outlook
  • A summary of IG Client Sentiment shows traders are net-short NZD/USD - the ratio stands at -1.87 (34.88% of traders are long) – typically bullish reading
  • Long positions are 7.34% higher than yesterday and 12.55% higher from last week
  • Short positions are 0.19% higher than yesterday and 8.47% lower from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests NZD/USD prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current NZD/USD price trend may soon reverse lower despite the fact traders remain net-short.

Key New Zealand / US Economic Releases

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

Economic Calendar - latest economic developments and upcoming event risk.

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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.

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