NZD/USD technical analysis: Struggles below 0.63 after weak breakout

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  • NZD/USD’s sideways breach of key falling trendline lacks conviction. 
  • A break above 0.6330 is needed to confirm a bullish breakout. 

NZD/USD is struggling to gather upside traction, having breached key falling trendline with a sideways move on Wednesday.

The currency pair is currently trading at 0.6289, representing marginal losses on the day, having hit a low of 0.6277 in the early Asian trading hours.

Notably, the pair has been restricted largely to a narrow range of 0.6330-0.6280 since Oct. 7 and has moved out of the trendline sloping downwards from July 22 and Sept. 22 highs. The trendline, however, has been breached with a sideways move and lacks conviction.

Hence, the bulls need to observe caution – more so, as the area near 0.6330 has emerged as a strong resistance over the last four trading days.

The outlook, therefore, would turn bullish if and when the pair finds acceptance above 0.6330. That may not happen on Thursday, courtesy of reports stating a US-China trade-talk fallout and the resulting risk aversion. As of writing, the futures on the S&P 500 are reporting a 0.78% drop.

Daily chart

Trend: Bullish above 0.6630

Technical levels

 

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