Forexrobots24

forex advisor developer

NZD/USD Technical Analysis: NZ Dollar to Bounce from 11-Year Low?

NZD/USD Technical ANALYSIS: BEARISH

  • New Zealand Dollar on pace for the longest losing streak in 4 months
  • Positive RSI divergence hints prices may bounce from an 11-year low
  • Sentiment studies offer mixed signals, leave door open to retracement

The New Zealand Dollar is working on the fifth consecutive day of losses against its US counterpart, a losing streak that would make for the worst performance in four months. A break below the 78.6% Fibonacci expansion at 0.5995 appears to initially expose the 100% level at 0.5872. Alternatively, a move back above 0.5995 – now recast as resistance – may set the stage for a retest of the 61.8% Fib at 0.6092.

New Zealand Dollar vs US Dollar price chart - daily

NZD/USD daily chart created using TradingView

Zooming in to the four-hour chart warns that downside follow-though may not be as readily forthcoming as the daily bar view suggests. The appearance of positive RSI divergence speaks to ebbing downside momentum and warns that a correction upward might be in the cards. Prices probably need to break falling trend line resistance set from the March 9 high to make the case for upside follow-through however.

New Zealand Dollar vs US Dollar price chart - 4 hour

NZD/USD 4-hour chart created using TradingView

Building Confidence in Trading

Building Confidence in Trading

Recommended by Ilya Spivak

Building Confidence in Trading

Get My Guide

NZD/USD TRADER SENTIMENT

New Zealand Dollar vs US Dollar price, trader sentiment chart

Retail sentiment data shows 66.02% of traders are net-long, with the longtoshort ratio at 1.94 to 1. IG Client Sentiment(IGCS) is typically used as a contrarian indicator, soretail traders being net-long suggests NZD/USD may continue to fall. However, positioningis less net-long than yesterday even though it is moresocompared with last week.This makes for a clouded sentiment-based outlook.

See the full IGCS sentiment report here.

How to Use IG Client Sentiment in Your Trading

How to Use IG Client Sentiment in Your Trading

Recommended by Ilya Spivak

Improve your trading with IG Client Sentiment Data

Get My Guide

NZD/USD TRADING RESOURCES:

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

To contact Ilya, use the Comments section below or @IlyaSpivak on Twitter