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Talking Points:
- NZD/USD Technical Strategy: Flat
- Support: 0.8555 (trend line), 0.8480-0.8513 (38% Fib ret., Oct 22 close)
- Resistance: 0.8581 (23.6% Fib ret.), 0.8675 (Apr’13 high)
The New Zealand turned lower against its US counterpart as expected after completing a bearish Dark Cloud Cover candlestick pattern. Sellers are testing rising trend lien support at 0.8555, with a break below that exposing the 0.8480-0.8513 area marked by the October 22 close and the 38.2%Fibonacci retracement. Alternatively, a reversal above the 23.6% level 0.8581targets the April 2013 top at 0.8675.
Risk/reward considerations argue against taking a short position with prices trading so close to relevant support.We will remain flat for the time being, waiting for a more attractive setup to present itself.
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Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com