NZD/USD Forex Technical Analysis – Pivot at .6521 Controlling Price Action
The New Zealand Dollar broke sharply on Wednesday after New Zealand Government bond yields plunged on concerns over an economic slowdown. The Kiwi was also pressured after the May Australia & New Zealand Banking Group (ANZ) business confidence survey and latest Reserve Bank of New Zealand (RBNZ) financial stability report served investors with a reminder of the challenges ahead for the currency.
On Wednesday, the NZD/USD settled at .6510, down 0.0033 or -0.51%.
Daily Technical Analysis
The main trend is down according to the daily swing chart, however, momentum shifted to the upside on May 23 with the formation of the closing price reversal bottom at .6481. A trade through .6481 will negate the chart pattern and signal a resumption of the downtrend.
The minor trend is also down. A trade through .6560 will change the minor trend to up. This will also reaffirm the shift in momentum.
The main range is .6686 to .6481. Its retracement zone at .6584 to .6608 is resistance.
The first minor range is .6614 to .6481. Its 50% level or pivot is .6548.
The second minor range is .6484 to .6481. Its pivot is .6533.
The third minor range is .6481 to .6560. Its pivot is .6521.
Daily Technical Forecast
Based on the early price action, the direction of the NZD/USD on Thursday is likely to be determined by trader reaction to the short-term pivot at .6521.
Bearish Scenario
A sustained move under .6521 will indicate the presence of sellers. This could drive the NZD/USD into a short-term uptrending Gann angle at .6506. Taking out this angle could create enough downside momentum to challenge the main bottom at .6481.
Bullish Scenario
A sustained move over .6521 will signal the presence of buyers. This could lead to a labored rally because of a series of potential resistance levels at .6531, .6533 and .6548. The latter is the last potential resistance before the .6560 minor top.
Taking out .6560 will indicate the buying is getting stronger with the next targets a downtrending Gann angle at .6576 and the main 50% level at .6584.
This article was originally posted on FX Empire
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