Kiwi Dollar Threatens the 3 Month Trend Line

NZD/USD (0.7283)

Points to consider with the Kiwi Dollar Forex market:

• The Kiwi Dollar is challenging a 3 month old trend line.
• No trade from a risk to reward standpoint at this time.
• Trade strategy: Stand aside

The NZD/USD Forex market has fallen lower after forming a bearish engulfing candlestick. Price action is now challenging a three month old trend line support, which can be seen on the below daily MT 4 chart. This trend line has been in play since May and guiding prices higher since then. A daily close below this trend line can redefine the trend in this particular Forex market.

Kiwi Dollar Technical Analysis

Let’s discuss today’s daily NZD/USD technical analysis. Trend line support is lining up at 0.7238. A daily close below this first downside barrier will challenge the next technical support that lines up at 0.7175. The alterative Kiwi Dollar technical analysis notes a cluster zone that runs to a double top. This area is at 0.7295 to 0.7307. A break above this first upside barrier challenges the next technical resistance level that lines up at 0.7368.

Trade Strategy

Let’s discuss today’s daily trade strategy. From a risk to reward standpoint, price action is too close to a technical support level to enter a short NZD sale. That move would be premature. Price action is also very narrow (average trading range or ATR). This is happening thanks to an upward sloping bound (lower). Taking all of this into consideration, I will opt to stand aside in the NZD/USD Forex market for now. I remain flat.