NZD/USD Technical Strategy: FLAT
- New Zealand Dollar struggling to follow through after range floor bounce
- Incoming fourth-quarter GDP data may offer greater directional conviction
- Looking for improved risk/reward, confirmation to re-establish a position
The New Zealand Dollar is struggling to find lasting upside follow-through against its US namesake after the latest downswing recoiled at familiar range support. Even a breach of minor support to expose the range top above 0.74 is proving challenging. Incoming GDP data may offer a bit of directional clarity.
A daily close above resistance at 0.7332, the 23.6% Fibonacci expansion, opens the door for a test of the 0.7428-34 area (38.2% level, September 20 high. Alternatively, a turn below trend line support at 0.7275 exposes range floor support in the 0.7177-86 zone (February 8 low, 38.2% Fib retracement) once again
The second half of an NZD/USD short trade opened at 0.7319 stopped out at breakeven after booking initial profit . With prices at resistance, entering long looks unattractive on risk/reward grounds. Meanwhile, re-establishing short needs confirmation of reversal. Staying flat seems most prudent for now.
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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