NZD Technical Analysis

The New Zealand Dollar put in a bearish Dark Cloud Cover candlestick pattern, hinting a turn lower against its US namesake may be ahead after a brief upswing. The setup has emerged after a retest of major trend line support-turned-resistance, seemingly bolstering the case for a bearish scenario.

Near-term support is at 0.7068, the 23.6% Fibonacci expansion, with a daily close below that opening the door for a test of the 38.2% level at 0.7005. Alternatively, a move back above the 0.7136-62 area (38.2% Fib retracement, trend line) paves the way for a challenge of the 50% threshold at 0.7187.

The second half of a short NZD/USD trade triggered at 0.7095 stopped out at breakeven amid recent gains after booking initial profit. Re-entering the position seems compelling but risk/reward considerations argue against it with prices squarely at support. Waiting on the sidelines seems most attractive for now.

more...

The plunge in NZDUSD has seen it all the way back down to an important trend-line rising up from August 2015, where it spiked down to just under 6200. Also in the vicinity is horizontal support running back to June. The two angles of support are creating confluence, which makes the area in the mid-6900s very important.

A turn higher here is needed if NZDUSD is to keep itself out of trouble; a break below support at hand, right here, right now, would put kiwi at risk of trading down to the December low of 6862 and possibly worse. Should selling push price below the Dec low, we would then look to an under-side trend-line in close proximity to the parallel married to the top-side trend-line from where the current decline began.

How NZDUSD responds here will be telling. It is currently trading below support, but that could change by day's end; putting in a reversal day. So we'll wait until the end of the New York session before drawing any concrete conclusions. Kiwi is known for sharp reversals after extended moves, and so it shouldn’t take long to turn higher, if it is to do so. With that in mind, should we see a bounce, but with little pep in its step over the next few days then it may not be long after before it attempts to break support and seek out those beforementioned levels. On the top-side, the first notable level of resistance we will look to on a rally is the trend-line running off the 2/7 high.

more...

The New Zealand Dollar may be preparing to re-accelerate downward for a challenge of lows established in early March against its US counterpart. Prices appear to have cleared the bottom of their near-term digestion range, paving the way for resumption of the downtrend begun in early February.

Partial profit was taken on a NZDUSD position activated at 0.7205. The next leg lower may now be getting underway and the trade has been scaled back up to full size at 0.6974, bringing the cumulative cost basis to 0.7090. Exposure will be cut in half again upon hitting the next downside target at 0.6905. A stop-loss on the full trade will be activated on a daily close above 0.7005.

more...

Daily price is above 200-day SMA in the bullish area of the chart.

The price is on ranging within 1.0760/1.1017 support/resistance levels waiting for the bullish trend to be resumed or for the secondary correction to be started.

The New Zealand Dollar is mired in a choppy congestion range below the 0.71 figure against its US cousin as prices struggle to find lasting directional momentum. Still, the broader longer-term trend bias appears to favor the downside.

Interim support is at 0.6975, the 23.6% Fibonacci expansion, with a daily close below that opening the door for a test of the 38.2% level at 0.6905. Alternatively, a push above the 38.2% Fib retracement at 0.7076 paves the way for a challenge of the 50% threshold at 0.7133.

Immediate selling pressure has ebbed and prices have become rudderless. Consolidation may precede downward resumption or a reversal higher, but thus far positioning looks non-committal. With that in mind, choosing to wait for a better-defined opportunity seems most attractive.

more...

The NZD/USD is trading off of new lows this morning, as the RBNZ (Reserve Bank of New Zealand) elected to keep key interest rates at 1.75%. While the decision to keep rates flat was not surprising, statements made by RBNZ’s Wheeler later in the session took a dovish stance. This news directly sent the NZD/USD to levels not seen since June of 2016.

Traders should note that the NZD/USD is now trading in a downtrend, with prices below both its 10 day EMA (exponential moving average) and 200 day MVA (simple moving average). Also the pair is set to close below .6862, which is the December 2016 swing low. A move to this point places the NZD/USD at new yearly lows, and suggests that the pair may fall further. In the event of a bullish reversal, traders should first look for prices to trade back above .6862, and then challenge the 10 day EMA found at .6888.

more...

The New Zealand Dollar is struggling to build downside momentum after seeming breaking the bounds of the upswing launched from mid-May lows. Still, overall positioning suggests that the choppy bearish trend defining price action since early September 2016 may be resuming.

Near-term support is in the 0.7259-63 area (14.6% Fibonacci expansion, former resistance). A break below that on a daily closing basis opens the door for a test of the 0.7208-15 zone (chart inflection point, 23.6% level). Alternatively, a push above the June 30 high at 0.7347 exposes a double top at 0.7382.

Current positioning does not seem to offer an actionable trading opportunity. Most critically from a practical perspective, prices are too close to near-term support to justify entering short on risk/reward grounds. With that in mind, opting for the sidelines seems appropriate for now.

more...

The New Zealand is attempting to make good on a break of rising trend support guiding the currency higher since mid-May against its US counterpart. Prices accelerated lower having struggled to find immediate downside follow-through after the government announced an NZ$1 billion housing fund.

From here, a daily close below the 0.7208-15 area (support shelf, 23.6% Fibonacci expansion) opens the door for a test of the 38.2% level at 0.7134. Alternatively, a push above the 0.7259-81 zone (former support, 14.6% Fib, trend line) paves the way for another challenge of the June 30 high at 0.7347.

more...

Last week, NZDUSD easily blasted on through resistance in the zone surrounding 7350. The trend is clearly higher along with its sibling currency pair, AUDUSD, and as such the path of least resistance upward won’t be easily reversed in either. The preferred way to enter is via a pullback, and most ideally at a level or zone of support. Kiwi has sound horizontal support in the 7350-vicinity along with a trend-line rising up from May; these align with the one-standard deviation one-week projected low of 7339. If the recent leg up is only the beginning of another sizable run higher like the one seen in May/June, then we might not see a pullback develop into support. But if it does, it could be a good low-risk, high-reward entry for longs. Overall, barring a major turn of events it looks unlikely we will see NZDUSD drop below noted support.

Looking higher, the one-week projected range-high is above the September high and well below major levels of resistance carved out in 2015 just over 7700. This means there may be room to run, and should the projected high be overcome then the options market may be proven in the short-term to have underestimated kiwi strength.

Heads up: On Wednesday, the FOMC will release its decision on interest rates and with the Fed expected to hold pat on rates, focus will be on the policy statement and hints as to what the central bank will do at the meeting in September.

more...

The New Zealand Dollar broke below trend line support guiding the move higher against its US cousin since mid-May, hinting a significant reversal is in the works. The move lower may reflect pre-positioning ahead of the upcoming RBNZ monetary policy announcement.

The next layer of significant support comes in at 0.7276, the 38.2% Fibonacci retracement. A daily close below that opens the door for a challenge of the 50% level at 0.7188. Alternatively, a move back above the 23.6% Fib at 0.7384 paves the way for a retest of the 14.6% retracement at 0.7450.

more...