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Talking Points:
- NZD/USD Technical Strategy: Flat
- Support: 0.7682, 0.7602, 0.7469
- Resistance:0.7772, 0.7831, 0.7937
The New Zealand Dollar may be bottoming against its US namesake following the appearance of a Bullish Engulfing candlestick pattern. Near-term channel top resistance is at 0.7773, with a break above that on a daily closing basis exposing the 14.6% Fibonacci retracement at 0.7831. Alternatively, a turn below the July 2013 bottom at 0.7682 clears the way for a challenge of the 38.2% Fibonacci expansion at 0.7602.
Risk/reward considerations argue against entering long with prices in close proximity to resistance. On the other hand, the absence of a defined bearish reversal signal suggests taking up the short side is premature. We will remain flat for now, waiting for a more actionable 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