New Zealand Dollar Price Outlook: NZD/USD Breakout Goes Parabolic

December 03
01:06 2019
  • NZD/USDbreakout testing initial resistance objectivesconstructive above-6400
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The New Zealand Dollar is up more than 1.3% against the US Dollar since the Asia open with a breakout in NZD/USD taking price to levels not seen since August. The These are the updated targets and invalidation levels that matter on the NZD/USD weekly price chart. Review my latest Weekly Strategy Webinar for an in-depth breakdown of this Sterling price setup and more.

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New Zealand Dollar Price Chart – NZD/USD Weekly

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Chart Prepared by Michael Boutros, Technical Strategist; NZD/USD on Tradingview

Notes: In my last New Zealand Dollar Weekly Price Outlook we noted that Kiwi had, “marked a bearish reversal off key resistance last week and the focus is on confluence support just above the 63-handle.” Price registered a low at 6322 before rebounding with NZD/USD breaching resistance at the 2018 low close at 6436 into the open this week.

The breakout has already extended into the next major level of confluence resistance at 6506– a region where the 2018 low-week converges on the 75% parallel of the broader descending pitchfork formation. The immediate advance may be vulnerable while below this threshold near-term with interim support now at 6436 backed by the median-line (currently ~6400) – Kiwi would need to hold above this slope for the breakout to remain viable. A topside breach / close above this threshold would keep the focus on subsequent resistance objectives at the 61.8% retracement at 6564 backed closely by the upper parallel.

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Bottom line: The New Zealand Dollar breakout is testing the first major zone of resistance and leave the immediate advance vulnerable while below 6506. From a trading standpoint, a good spot to reduce long-exposure / raise protective stops – be on the lookout for downside exhaustion ahead of the median-line IF Kiwi is indeed heading higher with a topside breach here needed o fuel the next leg higher in price. I’ll publish an updated Kiwi Price Outlook once we get further clarity on the near-term NZD/USD technical trade levels.

New Zealand Dollar Trader Sentiment – NZD/USD Price Chart

New Zealand Dollar Trader Sentiment - NZD/USD Price Chart - Kiwi Trade Outlook - Technical Forecast

  • A summary of IG Client Sentiment shows traders are net-long NZD/USD – the ratio stands at +1.21 (54.8% of traders are long) – weak bullish reading
  • Long positions are 2.96% higher than yesterday and 8.18% lower from last week
  • Short positions are 9.46% lower than yesterday and 10.31% 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 NZD/USD retail positioning are impacting trend- Learn more about sentiment!

Key New Zealand / US Data Releases

Key New Zealand / US Data Releases - NZD/USD Economic Calendar

Previous Weekly Technical Charts

  • US Dollar (DXY)
  • Japanese Yen (USD/JPY)
  • Sterling (GBP/USD)
  • Crude Oil (WTI)
  • Gold (XAU/USD)
  • Canadian Dollar (USD/CAD)
  • Australian Dollar (AUD/USD)

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— Written by Michael Boutros, Technical Currency Strategist with DailyFX

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