Technical Bias: Bearish
Key Takeaways
- New Zealand dollar climbed higher this past week against the US dollar, but failed to break a critical resistance area.
- NZDUSD formed a major resistance around 0.7680-0.7700, which holds the key moving ahead.
- In the US, the Consumer Confidence will be released by the Conference Board today, which is expected to decline from 96.4 to 96.0.
NZDUSD failing around the 0.7700 levels was crucial, as it gave sellers a reason to take it lower against the US dollar.
Technical Analysis
The New Zealand dollar upside was stalled around the 0.7700 area against the US dollar, which represents a major pivot area. The NZDUSD pair found support around the mentioned levels a couple of times earlier, and now the same support acted as a resistance for the pair. This was not all, as there is a resistance trend line formed on the daily chart, which also stopped the pair from moving higher. Moreover, the pair also failed to settle above an important confluence area of the 100-day simple moving average, and the 61.8% fib retracement level of the last drop from the 0.7890 high to 0.7178 low. In short, the recent failure was crucial, and might ignite more losses in NZDUSD moving ahead.
On the downside, there is a major support around the 50-day SMA at 0.7450. There is a chance that the NZDUSD pair might find buyers around the mentioned levels.
The daily RSI is above the 50 level, which is a positive sign in the short term.
US Consumer Confidence
Later during the NY session, the US Consumer Confidence will be released by the Conference Board. The forecast is lined up for a decrease from 96.4 to 96.0 in March 2015.
Trade Idea
One might consider selling rallies in the NZUSD pair as long as it is trading below the 100-day SMA.
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