NZD/USD at Key Inflection Point- Strength to be Sold Sub-7075
- NZD/USD sets weekly opening range just below key inflection zone
- Updated targets & invalidation levels
Technical Outlook:NZDUSD has set its weekly opening range just below former support, now resistance, noted last month at 6955/70. This region is defined by the 100% extension of the decline off the September high and the Brexit / November lows. Note that the 50-line of the descending pitchfork also converges on this zone today. Look for a break of this range with the broader outlook weighted to the downside while below 7054/75.
Notes: We’ll be looking for a break of the weekly opening range to offer near-term guidance while highlighting that a breach above this zone has resistance targets stacked up at 7001, 7035 & 7054/75- area of interest for exhaustion / short-entries. Note that this region represents the upper parallel of the descending pitchfork, the 100-day moving average & the April high and will serve as our bearish invalidation level.
Interim support rests at 6897 with a break below the lower parallel (red) needed to keep the short-bias in play targeting the 2016 open at 6829 & confluence support at 6782 where the median-line converges on the 61.8% retracement of the advance off last year’s low. From a trading standpoint, I’ll be looking to fade strength while within this formation with a break lower targeting subsequent support objectives.
A quarter of the daily average true range (ATR) yields profit targets if 18-20pips per scalp. Event risk is light out of New Zealand this week so look for US data releases to drive intraday prices. Keep in mind we still have the December Non-Farm Payrolls (NFP) report on tap on Friday.
Relevant Data Releases