(MENAFN- DailyFX) NZD/USD weekly technicals price consolidation narrows into critical range Check out our 2019 projections in our Free DailyFX USD Trading Forecasts Join Michael for Live Weekly Strategy Webinars on Mondays at 12:30GMT In this series we scale-back and look at the broader technical picture to gain a bit more perspective on where we are in trend. The New Zealand Dollar is down more than 2% against the US Dollar since the start of the month with the decline clearing a multi-week range in price. These are the updated targets and invalidation levels that matter on the NZD/USD weekly price chart. Review this week's Strategy Webinar for an in-depth breakdown of this setup and more.
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NZD/USD Weekly Price Chart Notes: In my previous NZD/USD Weekly Technical Outlook we noted that Kiwi had responded to confluence resistance at the 2019 highs with, 'the immediate advance vulnerable sub-6941. One month later and price is down more than 3.7% from the highs with Kiwi closing below yearly open support last week at 6705.
A break below the 2018 trendline keeps the focus lower while below confluence resistance around 6765/90 with initial downside support targets now eyed at the 61.8% retracement of the October advance at 6633 and the yearly range low at 6586. Weakness beyond this threshold would be needed to keep the short-bias viable targeting the low-week close at 6507 and the 2015 low-week close at 6453. Critical resistance and broader bearish invalidation steady at 6926/31.
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Bottom line: Kiwi has broken below both up-trend support and the multi-month range we've been tracking and leaves the risk weighted to the downside in NZD/USD. From a trading standpoint the immediate downside may be nearing exhaustion, but the medium-term focus remains lower while below the 100-day moving average at 6965 look for a reaction on a move into the yearly opening-range lows at 6586for guidance. I'll publish and updated NZD/USD Price Outlook once we get further clarity in near-term price action.
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NZD/USD Trader Sentiment A summary of IG Client Sentiment shows traders are net-long NZD/USD - the ratio stands at +2.34 (70.1% of traders are long) bearish reading Traders have remained net-long since April 2nd; price has moved 2.0% lower since then Long positions are 5.1% higher than yesterday and 0.5% lower from last week Short positions are 6.0% higher than yesterday and 12.6% 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. 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 Kiwi trading bias from a sentiment standpoint. See how shifts in NZD/USD retail positioning are impacting trend- Learn more about sentiment!
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--- Written by Michael Boutros , Technical Currency Strategist with DailyFX
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