Kiwi Price Outlook: New Zealand Dollar Recovery Could Be Short-Lived

The New Zealand Dollar is down 0.65% against the US Dollar since the start of the month with Kiwi rebounding off key confluence support late-last week. While the near-term picture allows for further gains, the broader risk remains weighted to the downside after breaking multi-year slope support earlier in the month. These are the updated targets and invalidation levels that matter on the NZD/USD charts this week.

NZD/USD DAILY PRICE CHART

(Click on image to enlarge)

NZD/USD Price Chart - New Zealand Dollar vs US Dollar Daily

Technical Outlook: In my latest NZD/USD Price Outlook we noted that Kiwi had, “turned from multi-month consolidation resistance and keeps the focus on a reaction just lower near the 2018 trendline. From a trading standpoint, we’ll favor fading weakness while below 6889 - look to reduce short-exposure / possible price exhaustion on a move lower. Ultimately a break below yearly open support at 6705would be needed to validate a larger turn in price.” NZD/USD registered a low at 6713 last week before rebounding with price holding just below former trendline support (now resistance) extending off the 2018 lows.

Note that daily momentum has continued to defend the 40-threshold as support – a break below this level alongside a break below yearly open support at 6705 would be needed to validate the reversal targeting 6633. Initial resistance stands with the 100-day moving average at ~6807 with a breach / close above the monthly open / 50% retracement at 6820/26 needed to alleviate further downside pressure.

NZD/USD 120MIN PRICE CHART

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Kiwi Price Outlook: New Zealand Dollar Recovery could be Short-Lived

Notes: A closer look at price action shows Kiwi rebounding off Fibonacci support at the 61.8% retracement of the yearly range / February at 6720/22 with the pair nearly completing an outside-day reversal off the lows on Friday. Initial resistance stands at 6781 backed by 6800/07 and 6820/26 – a close above this threshold would be needed to keep the long-bias viable. Support and near-term bullish invalidation rests with the 200DMA / lower parallel at 6732- a break below this zone would have us once again targeting the yearly open.

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