TechnoMeter

The New Zealand Dollar turned lower as expected, breaking the rising trend guiding the currency higher against its US counterpart since early December. The plunge played out against a backdrop of risk aversion that gripped financial markets amid worries about a steep Fed rate hike cycle.



Near-term support is now at 0.7186, the 38.2% Fibonacci retracement, with a break below that on a daily closing basis opening the door for a challenge of the 50% level at 0.7109. Alternatively, a move back above the 23.6% Fib at 0.7282 and support-turned-resistance at 0.7321 exposes 0.7434 anew.

The bearish chart setup appeared to be reinforced by attractive risk/reward parameters and a short NZD/USD position was activated at 0.7275, initially targeting 0.7186. A stop-loss will be activated on a daily close above 0.7321. Partial profit will be booked and the stop-loss trailed to breakeven upon hitting the first objective.

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