- NZDUSD Technical Strategy : Short at 0.6370
- Kiwi Aiming to Resume Down Trend on Range Floor Break
- Short Trade Triggered, Aiming for Move Below 0.63 Figure
The New Zealand Dollar looks vulnerable to deeper losses against its US counterpart after prices broke support near the 0.64 figure. Prices spiked to a six-year low last week but failed to maintain momentum, settling in a narrow range below the 0.65 mark.
From here, a daily close below the 38.2% Fibonacci expansion at 0.6219 exposes the next downside barrier at 0.6069, the 50% level. Alternatively, a move back above the 23.6% Fib at 0.6406 opens the door for a challenge of the 0.6497-0.6521 area, marked by the July 15 low and the 14.6% expansion.
We previously opted against taking a short trade on risk/reward grounds. The latest break lower has adequately expanded the trading range to improve positioning and we will now sell the pair, initially aiming for another test of 0.6219. A stop-loss will be activated on a daily close above 0.6521. We will take profit on half of the position and move the stop-loss to breakeven once the first objective is reached.