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Talking Points:

• NZD/USD Technical Strategy: Flat

• Support: 0.7767, 0.7682, 0.7602

• Resistance:0.7927, 0.8051, 0.8138

The New Zealand Dollar continued to rebound against its US counterpart but overall positioning suggests the move is corrective after last week’s breakdown. A daily close below the 23.6% Fibonacci expansionat 0.7767 exposes the 0.7682-7707 area marked by the July 2013 and September 2014 lows. Alternatively, a move through channel floor support-turned-resistance at 0.7927 opens the door for a test of the February 2014 low at 0.8051.

Prices are too close to resistance to justify entering long from a risk/reward perspective. On the other hand, the absence of a defined bearish reversal signal suggests that taking up the short side is premature. With that in mind we will remain flat for now.

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Daily Chart - Created Using FXCM Marketscope 2.0

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

original source

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