Weekly Technical Perspective on the New Zealand Dollar (NZD/USD)

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• A look at the weekly technicals for the New Zealand Dollar (NZD/USD)- key support in focus
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In this series we scale-back and take a look at the broader technical picture to gain a bit more perspective on where we are in trend. Here are the key targets & invalidation levels that matter on the New Zealand Dollar vs the US Dollar (NZD/USD) weekly chart. Review this week's Strategy Webinar for an in-depth breakdown of this setup and more.

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NZD/USD Weekly Price Chart

Notes: The New Zealand Dollar stretched into al critical support zone last week at 6663-6717 - a region defined by the 61.8% retracement of the 2015 advance and the 100% extension of the 2017 decline. Note that the median-line of the descending pitchfork formation extending off the 2017 highs and further highlights the technical significance of the threshold.

Initial resistance stands at 6855 backed by the 61.8% line / 2017 open at 6920 - a level of interest for possible exhaustion IF reached. A break lower from here risks substantial Kiwi losses with such a scenario targeting the 2015 low-week close / 78.6% retracement at 6453/88 .

For a complete breakdown of Michael's trading strategy, review his Foundations of Technical Analysis series on B uilding a T rading S trategy

Bottom line: Price is testing down-trend support and our final Kiwi target noted last month with the broader short-bias at risk while above 6663 near-term. From a trading standpoint, look to reduce short-exposure heading into this regions and be on the lookout for possible near-term exhaustion low. For now, there's no clear setup up here but I'll publish an updated NZD/USD scalp report in the days ahead once we get some more structure in near-term price-action.

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NZD/USD Trader Positioning

• A summary of IG Client Sentiment shows traders are net-long NZD/USD - the ratio stands at +2.2 (41.6% of traders are long) - weak bullish reading
• T raders have remained net- long since April 22 nd ; price has moved 7.9% lower since then
• Long positions are 1.1% lower than yesterday and 5.0% lower from last week
• Short positions are 13.8% lower than yesterday and 27.0% lower from last week
• We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests NZD / USD prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current positioning and recent changes gives us a stronger NZD / USD-bearish contrarian trading bias from a sentiment standpoint.

See how shifts in retail NZD/USD positioning are impacting trend- Le arn more about sentiment!

Relevant NZD/USD Data Releases

Economic Calendar - for the l atest e conomic d evelopments and u pcoming event ri sk

Previous Weekly Technical Perspectives

• Japanese Yen (USD/JPY)
• Crude Oil Prices (WTI)
• Euro (EUR/USD)
• British Pound (GBP/USD)
• Australian Dollar (AUD/USD)
• Canadian Dollar (USD/CAD)

--- Written by Michael Boutros , Technical Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex or contact him at mboutros@dailyfx.com

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.