The New Zealand Dollar drifted lower last week on low holiday volume. The focus for investors seemed to be concerns over the domestic economy as many investors have begun pricing in the possibility of a rate cut by the Reserve Bank of New Zealand in 2019. Perhaps limiting losses besides the low volume was the weaker U.S. Dollar.
Last week, the NZD/USD settled at .6707, down 0.0005 or -0.07%.
Weekly Swing Chart Technical Analysis
The main trend is up according to the weekly swing chart. However, momentum has been trending lower since the closing price reversal top during the week-ending December 7.
A trade through .6970 will negate the closing price reversal top and signal a resumption of the uptrend. The nearest main bottom is the October low at .6424.
The short-term range is .6424 to .6970. Its retracement zone at .6697 to .6633 is the primary downside target. Since the main trend is up, buyers could come in on a test of this zone after the New Year holiday.
On the upside, retracement level resistance comes in at .6743, .6818 and .6864.
Weekly Swing Chart Technical Forecast
Based on last week’s close at .6707, the direction of the NZD/USD this week is likely to be determined by trader reaction to the short-term 50% level at .6697.
A sustained move over .6697 will indicate the presence of buyers. The first upside target is the 50% level at .6743. This is a potential trigger point for an acceleration into the Fibonacci level at .6818, followed by the 50% level at .6864.
A sustained move under .6697 will signal the presence of sellers. This could trigger a steep break into the short-term Fibonacci level at .6633. This is a potential trigger point for an acceleration to the downside with an eventual move into the main bottom at .6424, followed by a major Fibonacci level at .6398.
Basically, look for the NZD/USD to strengthen this week on a sustained move over .6743. Look for the weakness to continue on a sustained move under .6697.
This article was originally posted on FX Empire
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