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Talking Points:
- NZD/USD Technical Strategy: Flat
- Support: 0.8322 (23.6% Fib exp.), 0.8242 (Feb 20 low)
- Resistance: 0.8372 (38.2% Fib exp., trend line, horizontal pivot), 0.8412 (50% Fib ret.)
The New Zealand Dollar launched a recovery against its US counterpart, taking out resistance at 0.8322 marked by the 23.6% Fibonacci expansion. The bulls now aim to challenge the 0.8372-82 area, marked by a now-familiar horizontal pivot level, the 38.2% Fib and a falling trend line set from mid-October. A reversal back below 0.8322 targets the February 20 low at 0.8242.
Maintaining a risk/reward ratio of at least 1:1 calls for a long entry price no higher than 0.8312. This level is not only below the current market, but underneath near-term support as well. As such, we will opt to stand aside and monitor how the pair resolves itself at resistance near the 0.84 figure to plan our next move.
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Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com