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Talking Points:
- NZD/USD Technical Strategy: Flat
- Support: 0.8297(50% Fib ret.), 0.8239 (38.2% Fib ret.)
- Resistance: 0.8355 (61.8% Fib ret.), 0.8427 (76.4% Fib ret.)
The New Zealand Dollar pushed higher as we suspected, overturning the downtrend from mid-January with a falling trend line break. Prices testing resistance in the 0.8355-82 area, marked by a horizontal pivot dating back to mid-September and the 61.8% Fibonacci expansion. A daily close above this barrier exposes the 76.4% level at 0.8427. Alternatively, a reversal below support at 0.8297, the 50% Fib, targets the 38.2% retracement at 0.8239.
Entering long here lacks confirmation of an upward breakout. On the other hand, a short trade in the face of potent upward momentum and the absence of a defined reversal signal is at best premature. As such, we will remain on the sidelines for now.
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Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com