NZD Technical Analysis

Talking Points

• NZD/USD Technical Strategy: Sidelines Preferred
• Dragonfly Doji Emerging, Yet Awaits Confirmation
• Spotlight Remains On The Late Feb Lows At 0.8260

NZD/USD is struggling to reclaim lost ground with an absence of bullish candlesticks casting doubt on a recovery. A Dragonfly Doji is emerging on the daily, which may offer a sign of hope to the bulls. Yet the key reversal pattern awaits confirmation from the close of the current candle and a successive up-period before being confirmed. This leaves the spotlight on the pair’s late February lows near 0.8260.

Struggles To Reclaim Lost Ground With Downtrend Intact



A similar narrative to the daily is present in intraday trade on the four hour chart. Buying interest at 0.8312 has halted the pair’s descent for now as a Bullish Engulfing pattern emerges. A leap over the nearby 0.8343 hurdle would be required to signal the potential for an intraday bounce to 0.8420.

Bullish Pattern Emerging In Intraday Trade



By David de Ferranti, Currency Analyst, DailyFX


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Talking Points

• NZD/USD Technical Strategy: Sidelines Preferred
• Hammer Candlestick Pattern Offers Bullish Reversal Signal
• Climb Over 0.8400 Needed To Suggest A Sustained Recovery

NZD/USD may have reached a turning point with a Hammer formation offering a sign of hope for the bulls. An ensuing up-day and close above the 0.8400 hurdle would be required to signal the potential for a more sustained recovery for the pair. Yet skepticism over a bounce may be warranted given the backdrop of a pronounced downtrend on the daily.

Hammer Offers Sign of Hope To The Bulls




A similar narrative to the daily is evident in intraday trade on the four hour chart. A bounce off the 0.8312 floor has yielded a a Morning Star pattern which signals a shift in sentiment for the pair. The leap over the 0.8343 hurdle opens the potential for a run on the psychologically-significant 0.8400 handle.

Bullish Pattern Emerges In Intraday Trade



By David de Ferranti, Currency Analyst, DailyFX


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Talking Points:

• NZD/USD Technical Strategy: Flat
• Support: 0.8330, 0.8283, 0.8206
• Resistance:0.8401-34, 0.8511, 0.8553-73

The New Zealand Dollar may be preparing to bounce against its US counterpart following the formation of a bullish Morning Star candlestick pattern. Near-term resistance is at 0.8401-34 area, marked by the 23.6% retracement and the June 4 low, with a break above that on a daily closing basis exposing the 38.2% level at 0.8511. Alternatively, a turn below the 14.6% Fib expansion at 0.8330 opens the door for a test of the 23.6% barrier at 0.8283.

Prices are too close to resistance to justify entering long from a risk/reward perspective. On the other hand, the absence of a defined bearish reversal signal suggests taking up the short side is premature. With that in mind we will remain flat for now.



--- Written by Ilya Spivak, Currency Strategist for DailyFX.com



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Talking Points

• NZD/USD Technical Strategy: Pending Short
• Remains At A Critical Juncture Near 0.8260
• Awaiting Downside Break to Open 0.8060

NZD/USD continues to skip across the critical 0.8260 barrier with a medley of short body candles suggesting caution from traders. A daily close below the nearby floor would be preferred for entering new short positions, given the context of a downtrend on the daily.

At A Crossroads Near Critical Barrier


The Harami noted in the most recent candlesticks report delivered a short-lived bounce for NZD/USD. The emergence of a Gravestone Doji now hints at a pullback for the pair over the session ahead. Buying interest is likely be renewed near the 0.8267 lows.

Gravestone Doji Offers Warning Of Intraday Weakness



By David de Ferranti, Currency Analyst, DailyFX


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Talking Points

• NZD/USD Technical Strategy: Pending Short
• Piercing Line Pattern Fails To Find Follow-Through
• Daily Close Below 0.8060 To Open Aug ’13 Lows

NZD/USD has resumed its journey lower in recent trade, which in turn has negated a Piercing Line pattern on the daily. As noted in recent reports the potential for a sustained recovery was questionable against the backdrop of a core downtrend. A daily close below the 0.8060 hurdle could open some significant room before buying interest is renewed at the August 2013 low near 0.7750. Whereas, a climb above the 0.8260 hurdle would likely be required to mark a small base for the pair.

Piercing Line Pattern Fails To Generate Follow-Through



The four hour timeframe offers greater hopes for a recovery for the Kiwi. A Harami pattern alongside a push beyond intraday resistance (now support) at 0.8120 hints at further gains over the session. Yet within the context afforded by the daily, selling into rallies remains preferred.

Selling Into Rallies Preferred Within The Context Of A Downtrend



By David de Ferranti, Currency Analyst, DailyFX


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Talking Points:

• NZD/USD Technical Strategy: Flat
• Support: 0.8067, 0.7998, 0.7887
• Resistance:0.8187, 0.8255, 0.8366

The New Zealand Dollar continues to oscillate in a familiar range around the 0.81 figure against its US namesake. Near-term resistance is at 0.8187, marked by the 14.6% Fibonacci retracement and a falling trend line, with a break above that on a daily closing basis exposing the 23.6% level at 0.8255. Alternatively, a reversal below the 14.6% Fib expansion at 0.8067 opens the door for a test of the 23.6% threshold at 0.7998.

Positioning is inconclusive for the time being. Entering long seems premature absent confirmation on a break of trend line resistance. On the other hand, a short trade is unattractive from a risk/reward perspective with prices sitting too close to support. We will remain flat for the time being.



--- Written by Ilya Spivak, Currency Strategist for DailyFX.com



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Talking Points

• EUR/USD corrects OBV divergence
• Volume picture remains supportive for USD/JPY
• Dramatic rise on Kei volume on Thursday

EUR/USD

• EUR/USD pierced last year’s low this week to trade at its lowest level since November 2012
• Daily volume has been in a steady rise since July which bolsters the medium-term downtrend
• Recent daily volume, however, remains below average and is a potential signal that the trend is in fatigue
• On-Balance-Volume (OBV) break to new lows support continuation of trend
• A move through 1.2895 on higher than normal volume is needed to confirm that a more serious counter-trend move is underway

USD/JPY

• USD/JPY is in consolidation mode below key long-term trendline resistance near 109.50
• A steady rise in volume has accompanied the move higher since July
• The steady rise in On-Balance-Volume is supportive
• Price move under 107.35 on above average volume, however, would force a re-think of the broader positve bias

NZD/USD

• NZD/USD fell to its lowest level in over a year this week
• Steady volume rise since July is supportive of trend
• New lows in daily OBV also supportive of trend
• Dramatic spike in volunme potentially exhaustive
• A daily close over .8080 on above average volume is needed to shift near-term bias higher

--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com


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Talking Points:

• NZD/USD Technical Strategy: Short at 0.7909
• Support: 0.7802, 0.7682, 0.7525
• Resistance:0.7937, 0.8034, 0.8109

The New Zealand Dollar may have resumed the down trend against its US namesake after prices violated the series of higher highs and higher lows set from early November. A daily close below the 14.6% Fibonacci expansion at 0.7802 exposes the 0.7682-96 area marked by the July 2013 bottom and the 23.6% level. Alternatively, a turn above the 23.6% Fib retracement at 0.7937 opens the door for a test of the October 21 high at 0.8034.

A shallow pull-up from last week’s lows has made for an improvement in risk/reward parameters and we will now enter short, initially targeting 0.7802. A stop-loss will be activated on a daily close above 0.7974. We will take profit on half of the position and move the stop-loss to breakeven once the first objective is met.



--- Written by Ilya Spivak, Currency Strategist for DailyFX.com



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Talking Points:

• NZD/USD Technical Strategy:Flat
• Support: 0.7787, 0.7624, 0.7533
• Resistance:0.7930, 0.8076, 0.8221

The New Zealand Dollar launched sharply higher against its US namesake following the RBNZ monetary policy announcement. A daily close above the 0.7897-0.7930area marked by the 23.6% Fibonacci retracement and a falling channel top exposes the 38.2% level at 0.8076. Alternatively, a reversal below the 14.6% Fib at 0.7787 opens the door for a test of the channel floor at 0.7624.

We will tactically opt against entering long. The markets appear enveloped by seasonal profit-taking on risk-geared positions, as expected. That may bode ill for the sentiment-sensitive Kiwi, meaning the up move might swiftly fizzle. As such, we will remain flat and look for the bounce to yield a selling opportunity in line with the larger trend.



--- Written by Ilya Spivak, Currency Strategist for DailyFX.com


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Talking Points:

• NZD/USD Technical Strategy:Flat
• Support: 0.7556, 0.7401, 0.7256
• Resistance:0.7691, 0.7827, 0.7974

The New Zealand Dollar looks set to test below the 0.76 figure against the US Dollar after narrowly overcoming chart support. A daily close below the 0.7556-80 area marked by the bottom of a falling channel and the 23.6% Fibonacci expansion exposes 38.2% level at 0.7401. Alternatively, a reversal back above the 14.6% Fib at 0.7691 opens the door for a test of channel top resistance at 0.7827.

A very narrow break of support and the Hammer-like structure of the latest candle hint at elevated false breakout risk. With that in mind, we will tactically opt not to pursue a short position at this time and remain on the sidelines, waiting for a more attractive opportunity to present itself.



--- Written by Ilya Spivak, Currency Strategist for DailyFX.com



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