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Talking Points:
- NZD/USD Technical Strategy: Flat
- Support: 0.8679 (23.6% Fib exp.), 0.8617 (14.6% Fib exp.)
- Resistance: 0.8745-81 (38.2% Fib exp., Apr 10 high), 0.8863 (50% Fib exp.)
The New Zealand has turned sharply higher against its US counterpart, rising to the highest level in close to three years. Buyers are testing resistance in the 0.8745-81 area, marked by the April 10 high and the 38.2% Fibonacci expansion. A break above this boundary on a daily closing basis exposes the 50% level at 0.8863. Alternatively, a reversal below support at 0.8679, the 23.6% Fib, targets the 14.6% expansion at 0.8617.
Risk/reward considerations argue against taking a long position with prices in so close to relevant resistance. We will continue to stand on the sidelines for the time being, waiting for a more attractive trade opportunity to present itself.
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Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com