The New Zealand Dollar is inching higher early Tuesday, piggy-backing a similar move in the Australian Dollar. The Kiwi may be getting a boost from a weaker U.S. Dollar, but a slight rise in U.S. Treasury yields may be capping gains.
Fundamentally speaking, gains in the currency are likely being limited by a report showing New Zealand consumer confidence plunged to its lowest level since 1988.
At 05:23 GMT, the NZD/USD is trading .6333, up 0.0003 or +0.04%.
Consumer Confidence Drops
The Westpac McDermott Miller Consumer Confidence Index dropped sharply in the June quarter, falling to the lowest level recorded since the survey began in 1988.
The drop of 13 points to a level of 78.7 indicates that there are far more New Zealanders who are pessimistic about the economic environment than those that are optimistic.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through .6196 will signal a resumption of the downtrend. A move through .6576 will change the main trend to up.
The minor range is .6196 to .6396. Its 50% level at .6296 is the nearest support. This is followed by long-term Fibonacci support at .6231.
The short-term range is .6576 to .6196. Its 50% level at .6386 is the nearest resistance. This is followed by long-term 50% resistance at .6467.
Daily Swing Chart Technical Forecast
Trader reaction to the minor pivot at .6296 is likely to determine the direction of the NZD/USD on Tuesday.
A sustained move over .6296 will indicate the presence of buyers. If this move creates enough upside momentum then look for a surge into the short-term 50% level at .6386, followed by .6396. The latter is a potential trigger point for an acceleration into the long-term 50% level at .6467.
A sustained move under .6296 will signal the presence of sellers. If this generates enough downside momentum then look for the selling to possibly extend into the long-term Fibonacci level at .6231, followed by the main bottom at .6196.
Taking out .6196 will change the main trend to down. This is also the last potential support before the May 15, 2020 main bottom at .5921.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire