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Talking Points:
- NZD/USD Technical Strategy: Flat
- Support: 0.8581 (23.6% Fib ret.), 0.8480-0.8513 (38% Fib ret., Oct 22 close)
- Resistance: 0.8675 (Apr’13 high), 0.8745 (Apr 10 high)
The New Zealand reversed downward against its US namesake as expected after prices completed a bearish Dark Cloud Cover candlestick pattern. The pair has moved to test support at 0.8581, the 23.6% Fibonacci retracement. A breach below this boundary on a daily closing basis targets the 0.8480-0.8513 area, marked by the October 22 close and the 38.2% level. Alternatively, a turn upward above the April 2013 top at 0.8675 aims for the April 10 peak at 0.8745.
The available trading range is too narrow to justify a trade from a risk/reward perspective. We will continue to stand aside for now, looking for a more attractive entry to present itself.
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Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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