New Zealand Dollar Technical Price Outlook: NZD/USD Weekly Trade Levels
- New Zealand Dollar updated technical trade levels - Weekly Chart
- NZD/USD reverses off downtrend resistance- plunge targeting initial support objectives
- Resistance 6538 (key), 65721/33, 6840 – support 6353, 6287 (key), 6196-6233
The New Zealand Dollar plunged more than 1.6% against the US Dollar since the start of the week as the commodity bloc remains on defense for the second consecutive week. A reversal off technical downtrend resistance last week has Kiwi targeting near-term support just lower and we’re looking for a reaction there for guidance in the weeks ahead. These are the updated targets and invalidation levels that matter on the NZD/USD weekly price chart. Review my latest Strategy Webinar for an in-depth breakdown of this Kiwitrade setup and more.
New Zealand Dollar Price Chart – NZD/USD Weekly
Chart Prepared by Michael Boutros, Technical Strategist; NZD/USD on Tradingview
Notes: In last month’s New Zealand Dollar Weekly Technical Forecast we noted that NZD/USD had, “responded to slope support and threatens a near-term recovery within the broader downtrend.” The support zone in focus was 6196-6233- a region defined by the 2015 / 2019 lows and the 61.8% Fibonacci retracement of the 2020 advance. Kiwi rallied more than 5.7% in the following weeks with price faltering at confluent resistance around the January close low at 6538 (intra-week high registered at 6575). Was a more significant low registered last month?
The immediate focus is on this pullback from resistance with key support objectives eyed at the 61.8% retracement of the May rally at 6353 and the objective low-week close at 6287- both levels of interest for possible downside exhaustion IF reached. Ultimately, a breach / close above 6538 is needed to suggest a more significant bear-market recovery is underway with such a scenario exposing the 61.8% retracement of the yearly range / 2020 yearly open at 6721/33.
Bottom line: The New-Zealand Dollar has rebounded off downtrend support with the recovery faltering at former support – now resistance. From at trading standpoint, look to reduce short-exposure / lower protective stops on a stretch towards the 6350 – losses should not exceed 6287 IF price is indeed heading higher on this correction. Ultimately a larger recovery here may offer more favorable opportunities closer to downtrend resistance. I’ll publish an updated NZD/USD Technical Price Outlook once we get further clarity on the near-term Kiwi 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 +1.02 (49.46% of traders are long) – typically neutral reading
- Long positions are 5.19% lower than yesterday and 4.53% lower from last week
- Short positions are 8.95% higher than yesterday and 19.15% higher 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. Traders are further net-short than yesterday and last week, and the combination of current positioning and recent changes gives us a stronger NZD/USD-bullish contrarian trading bias from a sentiment standpoint.
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--- Written by Michael Boutros, Technical Currency Strategist with DailyFX
Follow Michael on Twitter @MBForex
