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NZD/USD Forex Technical Analysis – Strengthens Over .6781, Weakens Under .6762

The New Zealand Dollar tumbled on Wednesday to its lowest level February 13. The selling was fueled by traders increasing bets on a rate cut by the Reserve Bank of New Zealand later this year. The catalyst behind the selling pressure was a weaker than expected Australian Gross Domestic Product report.

Early Thursday, the Kiwi is trading slightly better. Oversold conditions may be behind the strength, given the currency is down eight sessions from its last main top on February 25. The New Zealand Dollar is also diverging from the Australian Dollar, which is trading lower in reaction to mixed economic data.

At 00:46 GMT, the NZD/USD is trading .6777, 0.0007 or +0.10%.

Daily NZD/USD
Daily NZD/USD

Daily Technical Analysis

The main trend is down according to the daily swing chart. The trend turned down on Wednesday on a trade through the last swing bottom at .6758. The NZD/USD is not in a position to change the main trend to up, but it is inside the 7 to 10 day window of time for a closing price reversal bottom.

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Today’s session begins with the NZD/USD trading on the bearish side of a major retracement zone at .6781 to .6825. This zone is new resistance.

The main range is .6592 to .6943. Its retracement zone at .6767 to .6726 was tested on Wednesday. This area has acted as support in the past with bottoms at .6758 and .6719 occurring at or near this zone.

Daily Technical Forecast

Based on Wednesday’s price action and today’s early move, the direction of the NZD/USD on Thursday is likely to be determined by trader reaction to the uptrending Gann angle at .6762.

Bullish Scenario

A sustained move over .6762 will indicate the presence of buyers. The Forex pair could struggle early with 50% level resistance coming in at .6767 and .6781.

The 50% level at .6781 is a potential trigger point for an acceleration into a pair of uptrending Gann angles at .6804 and .6817, followed by a major Fibonacci level at .6825.

Bearish Scenario

A sustained move under the Gann angle at .6762 will signal the presence of sellers. This could trigger an acceleration to the downside with the next targets the main Fibonacci level at .6726, followed by a main bottom at .6719.

The trend is down, however, we could see one more counter-trend rally into resistance before the selling resumes.

This article was originally posted on FX Empire

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