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The New Zealand Dollar may be topping against its US counterpart having edged past support at a rising trend line set from early February after forming a Bearish Engulfing candle pattern. Sellers are now testing the 0.8500-13 area, marked by the October 22 close and 23.6% Fibonacci retracement, with a break below that exposing the 38.2% Fib at 0.8414. Trend line support-turned-resistance is now at 0.8561.
Risk/reward considerations argue against entering short with prices so close to support. On the other hand, taking up the long side looks premature absent a defined reversal signal. We will continue to stand aside until a more actionable setup emerges.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com