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The New Zealand Dollar may on the verge of a bearish reversal against its US namesake after producing a Shooting Star candlestick below resistance at 0.8380, marked by a falling trend line set from mid-October and the 38.2% Fibonacci expansion. Initial support is at 0.8254, the 23.6% Fib. Alternatively, an upward through resistance exposes the 50% level at 0.8481.
Confirmation of a downturn is pending for now and we will wait for that to materialize before looking for a short trade setup. On the other hand, current positioning offers little evidence to argue in favor of a long trade setup. We will continue to monitor price action from the sidelines for now.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com