The New Zealand Dollar is trading higher early Monday with the currency likely being supported by upbeat comments about a trade deal over the week-end. United States national security adviser Robert O’Brien said on Saturday that an initial trade agreement with China is still possible by the end of the year, but warned Washington would not turn a blind eye to what happens in Hong Kong.
At 03:46 GMT, the NZD/USD is trading .6422, up 0.0017 or +0.26%.
Ahead of the week-end, Gao Feng, China’s Ministry of Commerce spokesman said, “external rumors” about a trade talk snag are not accurate, and noted the two trade delegations remain in close communication.
Shortly afterwards, there was a report that China invited the U.S. trade delegation to Beijing for face-to-face talks. President Trump then told Fox News both sides were “very close,” and Chinese President Xi Jinping told a visiting U.S. business delegation that China holds a “positive attitude” toward the trade talks.
Putting a lid on the Kiwi were comments from the RBNZ and the RBA last week which traders took to suggest both are more dovish than previously thought.
RBNZ Assistant Governor Christian Hawkesby reiterated that the economy was in good shape but the Bank was prepared to ease again if needed. Hawkesby highlighted the importance of the global outlook to the Bank’s policy deliberations.
Daily Technical Analysis
The main trend is down according to the daily swing chart, however, momentum has been trending higher since mid-November when the Reserve Bank of New Zealand (RBNZ) surprised investors by putting an expected rate cut on hold.
The main trend will change to up on a trade through .6466. A move through .6322 will signal a resumption of the downtrend.
The short-term range is .6466 to .6322. Its retracement zone at .6411 to .6394 is providing support.
The main range is .6204 to .6466. Its retracement zone at .6335 to .6304 is major support. This zone stopped the selling on November 8 at .6322.
Daily Technical Forecast
Based on the early price action and the current price at .6422, the direction of the NZD/USD the rest of the session is likely to be determined by trader reaction to the downtrending Gann angle at .6429.
A sustained move over .6429 will indicate the presence of buyers. The first target is last week’s high at .6437. This is followed by a downtrending Gann angle at .6447. This is the last potential resistance angle before the .6466 main top.
A sustained move under .6429 will signal the presence of sellers. This could trigger a break into the short-term Fibonacci level at .6411, followed by and uptrending Gann angle at .6399 and a short-term 50% level at .6394.
This article was originally posted on FX Empire
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