Yahoo Finance NZD/USD Forex Technical Analysis – Testing Retracement Zone Resistance at .6831 to .6858
The New Zealand Dollar is edging lower early Wednesday as investors digest another defeat of British Prime Minister Theresa May’s Brexit deal. After her defeat, May continued to insist that her deal was the best option, but said would, as promised, allow Members of Parliament (MP) now to vote on whether to leave the EU with no deal.
With dozens of her own MP’s voting for a second time to reject her EU withdrawal agreement and her authority severely damaged, UK politicians are calling for May to step down. “The PM has lost all control. If she had an ounce of decency she’s resign,” said opposition Labour lawmaker Lou Haigh.
Later today, investors will get the opportunity to react to the latest U.S. data on Durable Goods and Producer Inflation.
At 01:00 GMT, the NZD/USD is trading .6854, down 0.0007 or -0.10%.
Daily Technical Analysis
The main trend is down according to the daily swing chart. A trade through .6903 will change the main trend to up. A move through .6744 will signal a resumption of the downtrend.
The main range is .6943 to .6719. Its retracement zone at .6831 to .6858 is controlling the near-term direction of the Forex pair. Currently, the NZD/USD is straddling the upper or Fibonacci level at .6858.
The major support is a longer-term retracement zone at .6767 to .6726. This zone stopped the selling at .6744 on March 7.
Daily Technical Forecast
Based on the early price action, the direction of the NZD/USD on Wednesday is likely to be determined by trader reaction to the Fibonacci level at .6858.
Bullish Scenario
A sustained move over .6858 will indicate the presence of buyers. If this move creates enough upside momentum then look for a quick surge into a downtrending Gann angle at .6873. This angle is resistance. It stopped a rally on February 25 at .6903 and on March 12 at .6874.
Look for sellers on the first test of .6873, but be prepared for a breakout to the upside if it is taken out with conviction. This could trigger a surge into the next downtrending Gann angle at .6888. This is the last resistance angle before the .6903 main top.
Bearish Scenario
A sustained move under .6858 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to extend into the main 50% level at .6831, followed closely by the uptrending Gann angle at .6824.
Look for counter-trend buyers on the first test of .6824. If it fails then look for an acceleration to the downside. The daily chart indicates that this is the trigger point for a steep break with the next target angle coming in at .6784.
This article was originally posted on FX Empire
