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Talking Points:
- NZD/USD Technical Strategy: Flat
- Support: 0.7998, 0.7887, 0.7798
- Resistance:0.8067, 0.8188, 0.8229
The New Zealand Dollar paused to consolidate losses against its US namesake after dropping to the lower level in over 12 months. Near-term support is at 0.7998, the 23.6% Fibonacci expansion, with a break below that on a daily closing basis exposing the 38.2% threshold at 0.7887. Alternatively, a reversal back above the 14.6% Fib at 0.8067 opens the door for a test of falling trend line resistance at 0.8188.
Although a short position is tempting, the appearance of positive RSI divergence hints at fading bearish momentum and warns of the possibility of an upswing on the horizon. We will continue to stand aside for now, waiting for a better-defined 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