Kiwi Dollar sees a Possible Top Forming

Points to consider with this Kiwi Dollar Forex market:

• The Kiwi Dollar is forming an evening star candlestick which is a sign the bearish trend is returning.
• Price action is too close to a technical support level to enter a desired short NZD sale.
• Trade strategy: Stand aside

The NZD/USD Forex market has turned lower, as expected. Price action stalled before a trend defining rising trend line, and near the key 0.72 pivot level. Please refer to the below daily MT 4 chart and note the bearish evening star candlestick just below 0.72 and below the trend line. This suggests the longer-term bearish market is back in action as the recovery with the Kiwi Dollar is running out of momentum.

Kiwi Dollar Technical Analysis

Let’s discuss today’s technical analysis with the New Zealand Dollar. The first layer of technical support is lining up at 0.7120. A daily close below this first downside barrier opens the doors to challenge the next layer of technical support that lines up at 0.7057. The alternative New Zealand Dollar technical analysis, should the NZD recover, notes the trend line resistance level that lines up at 0.7188. This is also a former technical support level. A break above this first upside barrier will see this Forex market challenge the next technical resistance level that lines up at 0.7237.

Trade Strategy

Let’s discuss today’s NZD/USD trade strategy. Price action is right on top of a technical support level right now. This makes a short NZD sale, which is desirable, a bit premature from a risk to reward perspective. There is also no clear cut bullish signs, making a long NZD buy premature. Also, the Federal Reserve is meeting this week to set monetary policy which should cause some volatility with the US Dollar. Taking all of this into account, I will opt to stand aside and remain flat in this particular Forex market.