Kiwi Dollar Forms a New Top and Moves Lower

Points to consider in this Kiwi Dollar market:

• The Kiwi Dollar seems to have formed a new top below 0.73 against the US Dollar.
• There is no short NZD trade at this time as the average trading range (ATR) is too narrow.
• Trade strategy: Stand aside

The NZD/USD Forex market appears to have established a near term top after a bearish engulfing candlestick appeared below the 0.7 pivot. This sentiment linked currency is also feeling selling pressure thanks to the recent Brexit vote which saw the United Kingdom exiting the European Union. Like other sentiment lined currencies the Kiwi Dollar sold off after the vote and continues to show weakness.

Kiwi Dollar Technical Analysis

Let’s discuss today’s daily NZD/USD technical analysis. Then we will talk trade strategy. There is near term support lining up at 0.6985. A daily close below this first downside barrier, challenges the next technical support level that lines up at 0.6912. The alternative Kiwi Dollar technical analysis, notes the first upside barrier lining up at 0.7060. A break above this level challenges the next upside barrier that lines up at 0.7149/50.

Trade Strategy

Let’s talk NZD/USD trade strategy for today. It is very tempting to enter a short NZD sale but the ATR is just too narrow from a risk to reward standpoint. There is also some volatility remaining from the Brexit fallout. Keeping this in mind, I will opt to stand aside and remain flat in this particular Forex market until a more appealing short NZD sale comes along.