NZD/USD – Waiting for a Top to Form

The NZD/USD Forex market has moved higher this week. Prices have found support near the pivot at 0.67 and have risen to a two month high. Price action is now testing the falling trend line that has been capping prices for 17 months. This trend line originates back in mid-July of 2014. There is also the RSI indicator to consider. This is beginning to flatten out which hints to ebbing buying momentum and that the correction higher could be coming to an end.

Technical Analysis

Now let’s look at today’s daily NZD/USD technical analysis. Basically there is no change from my earlier technical analysis in this Forex market. There is near term support lining up at 0.6778/77. A daily close below this technical level challenges the technical support lining up at 0.6679/80. The alternative NZD/USD technical analysis, should the Kiwi Dollar gain strength, notes technical resistance at the end of a congestion area starting at the trend line. This technical area runs from 0.6837 to 0.6848. A break above this technical resistance level challenges the next technical resistance lining up at another congestion area running to the October 15 high. This area runs from 0.6885 to 0.6898.

Trade Strategy

Let’s discuss today’s daily NZD/USD trade strategy. I want to enter a short NZD trade in line with the overall bearish sentiment in this market.  However, there is no clear cut bearish reversal signal yet and we are trading too close to a key technical resistance level to pull a trigger on any trade. A short or long NZD trade is still a bit premature. We are also trading too close to that above mentioned trend line. All of these indicate caution not to pull the trigger on a trade yet. For now, I will sit on the sidelines till a better trade opportunity comes along. I am flat in the NZD/USD Forex market.