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Talking Points:
- NZD/USD Technical Strategy: Flat
- Support: 0.8658-69, 0.8618, 0.8567
- Resistance:0.8733, 0.8779-93, 0.8835-42
The New Zealand Dollar has stopped to catch its breath after last week’s aggressive selloff against the US Dollar ahead of the RBNZ policy announcement. Near-term support is in the 0.8658-69 area, marked by the 38.2% Fibonacci retracement and the June 17 close. A break below this barrier on a daily closing basis initially exposes the 50% level at 0.8618. Alternatively, a reversal above the 23.6% Fibat 0.8733 opens the door for a test of the 0.8779-93 zone, bracketed by the May 6 and June 27 swing highs.
Risk/reward considerations argue against entering short with prices trading in close proximity to support. On the other hand, the absence of a defined bullish reversal signal suggests taking up the long side is premature. We will remain flat for now.
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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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