NZD/USD: Bullish flag false breakout on first attempt, 0.6910 eyed ahead of 50% Fibo

• NZD/USD is back testing the flag resistance/support level following a run above 0.69 the figure in North America.
• NZD/USD is currently trading at 0.6889, unchanged on the trade balance data within a narrow range of 0.6883 and 0.6890.  

NZD/USD has attempted a run high to the 0.69 handle, where it scored a high of 0.6903. This was spurred on by some dollar weakness coming through in the US session and leaves the techncial picture bullish, with the potential of a continuation of the bull trend est. again on the 22nd Feb from lows of0.6757.

The trade data for January came in as -914m (vs. expected -300m and prior 264m).

“Kiwi struggles to find direction, as trade optimism fades. NZD is likely to be fairly range bound without more global news and as we wait for more pieces of the GDP puzzle,”

analysts at ANZ Bank explained.  

NZD/USD levels

• Support 0.6800  
• Resistance 0.6910

The bullish flag has been carving out its formation since yesterday’s highs of 0.6901 and overnight lows of 0.6871. However, the false breakout leaves the trade plan in jeopardy of a test back into the flag and thus nullifying the plan on first attempt breakup. A break of 0.6860 leaves the near term outlook neutral/bearish. However, on a break of 0.6895, if bulls commit at this juncture, commitment to the upside could see a test of stale shorts and their buy stops, opening a run higher beyond the measurement of the flag’s pole of 27 pips which would leave 0.6910 under pressure and bring in scope for the 50% Fibo retracement level of the 2018 – YTD decline at 0.6930.