AdrianRaymondFX
Short

Kiwi dollar reaching for important resistance level

FX:NZDUSD   New Zealand Dollar/U.S. Dollar
The Kiwi dollar is reaching fresh 12-month highs this week, and spot prices may hit the $0.72 level within the next couple of trading sessions. In my chart, I've highlighted a channel with a slight upwards angle (compared to the sharp downtrend prior to June 2015) as well as the 38.2% Fib level (2014 highs to 2015 lows). This Fib level actually corresponds with an old support that was established between February and March 2015. After breaking at the end of May 2015, it acted as resistance, and prices plummeted even further after the textbook-like pullback in June. This level should be watched closely this week. I wouldn't recommend any trades before the British referendum results, which may or may not have a strong impact on the New Zealand dollar (likely impact would be from global risk sentiment and would affect all risk assets). If at the end of the week, you may wish to look at short strategies around the $0.72 handle as the risk/reward ratio would be decent enough (theoretically a swing strategy with at least $0.70 as a short-term target). I would target $0.68 if a clear bearish reversal were to take place. Finally, if prices shoot past $0.725 without any bearish indications in price action, I would forget this setup altogether even if prices were to subsequently start falling back below $0.72. I'm looking for a clean bearish reversal here.
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