(MENAFN- DailyFX) NZD/USD responding to near-term support; risk for larger recovery Check out our 2018projections in our Join Michael for Live Weekly Strategy Webinars on The New Zealand Dollar has fallen more than 3% from the monthly highs with a break of the June shifting the focus toward a late-month low in NZD/USD. That said, the decline failed to hold a break below the May lows with a rebound off confluence support threatening a larger recovery in in price. These are the updated targets & invalidations levels that matter for NZD/USD in the near-term.
NZD/USD Daily Price Chart Technical Outlook: In this week's , we highlighted the breakdown in Kiwi while noting that, 'price is now approaching levels support targets of interest that could interrupt this decline in the near-term. The first region is defined by 6811/28 where the 2016 open and the 2017 low-day close converge on the 50-line of the extending off the 2017 & 2018 highs- price is responding to this threshold today.
Daily resistance stands at the highlighted trendline confluence around ~6940s with bearish invalidation up at the monthly open at 6999- a breach there would be needed to suggest a more significant low is in place for NZD/USD. A downside break / daily close below this support zone targets subsequent objectives at the 2017 lows at 6780 backed by the 61.8% retracement of the 2015 advance at 6716.
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NZD/USD 120min Price Chart Notes: A closer look at NZD/USD price action highlights today's reversal off support with the advance now eyeing initial resistance at the 23.6% retracement at 6881. IF Kiwi is heading higher, look for support to hold ahead of the May lows at 6850 with a topside breach targeting subsequent resistance objectives at 6915/20 and 6944 (area of interest for possible exhaustion if reached).
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Bottom line: The near-term risk is for a larger recovery on this rebound with our focus higher while above 6850. Ultimately a larger recovery should offer more favorable short entries near structural resistance. From a trading standpoint, I'll favor fading weakness while above today's low targeting a move back towards former the underside of the May . Keep in mind the RBNZ (Reserve Bank of New Zealand) interest rate decision is on tap next week alongside an uptick in key US data releases.
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NZD/USD IG Client Positioning A summary of shows traders are net-long NZD/USD- the ratio stands at +1.99 (66.5% of traders are long) bearishreading Traders have remained net-long since April 22nd; price has moved 6.7% lower since then Long positions are 6.7% higher than yesterday and 1.7% higher from last week Short positions are7.9% higher than yesterday and 29.8% lower from last week We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests NZD / USD prices may continue to fall. Yet traders are less net-long than yesterday but more net-long from last week and the combination of current positioning and recent changes gives us a further mixed NZD/USD trading bias from a sentiment standpoint. See how shifts in NZD/USD retail positioning are impacting trend-
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