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Talking Points:
- NZD/USD Technical Strategy: Flat
- Support: 0.8246 (38.2% Fib exp.), 0.8201 (50% Fib exp.)
- Resistance: 0.8301 (23.6% Fib exp.), 0.8382 (trend line, horizontal pivot)
The New Zealand Dollar continues to sink after recoiling from resistance at the intersection of a horizontal pivot in play since mid-September 2013 (0.8382) and a falling trend line set from late October. Sellers are now testing support at 0.8246, the 38.2%Fibonacci expansion, with a break below that exposing the 50% level at 0.8201. Alternatively, a turn back above the 23.6% Fib at 0.8301 targets 0.8382 anew.
Risk/reward considerations argue against a short position with prices trading squarely at relevant support, while the absence of a reversal signal warns against taking up the long side. We will remain flat for now until an actionable setup presents itself.
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Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com