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Talking Points:
- NZD/USD Technical Strategy: Flat
- Support: 0.6956, 0.6871, 0.6786
- Resistance:0.7061, 0.7126, 0.7231
The New Zealand Dollar dropped to the lowest level in five years against its US counterpart but positive RSI divergence warns of ebbing downside momentum. Near-term support is at 0.6956, the 38.2% Fibonacci expansion, with a break below that on a daily closing basis exposing the 50% level at 0.6871. Alternatively, a move above the 0.7024-61 area (June 5 low, 23.6% Fib) opens the door for a test of the 14.6% expansion at 0.7126.
Prices are wedged too closely between near-term support and resistance levels to justify taking a trade on a long or short side from a risk/reward perspective. With that in mind, we will continue to stand aside until a more attractive opportunity presents itself.
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— Written by Ilya Spivak, Currency Strategist for DailyFX.com