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The New Zealand Dollar continued to push higher after yesterday’s break of resistance at 0.8380 marked by the 38.2% Fibonacci expansion and a falling trend line set from mid-October. The next layer upside barrier of significance lines up at 0.8481, the 50% Fib, with a further push beyond that eyeing the 61.8% level at 0.8583. Alternatively, a reversal back below 0.8380 eyes the 23.6% level at 0.8254.
We begrudgingly opted not to pursue a long position yesterday, worrying that the Kiwi’s sensitivity to risk appetite trends cast doubt on the probability of follow-through as sentiment continues to hinge on a fluid geopolitical crisis in the Ukraine. We remain leery as bearish cues in S&P 500 positioning warn of a risk-averse turn in the markets’ mood ahead and will continue to observe from the sidelines for now.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com