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Talking Points:
- NZD/USD Technical Strategy: Flat
- Support: 0.8502 (76.4% Fib exp.), 0.8452 (61.8% Fib exp.)
- Resistance: 0.8522 (Mar 7 high), 0.8582 (100% Fib exp.)
The New Zealand Dollar is making a strong case for continued gains against its US namesake after prices took out resistance at 0.8502 – the 76.4% Fibonacci expansion – following the RBNZ interest rate decision. A push above the March 7 high at 0.8522 aims for the 100% Fib at 0.8582. Alternatively, a reversal back below 0.8502 eyes the 61.8% level at 0.8452.
Risk/reward considerations argue against taking a long position with prices trading squarely at relevant resistance. On the other hand, a short position taken on the assumption that resistance will hold seems premature without a defined reversal signal. We will continue to stand aside for now.
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Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com