The New Zealand Dollar is trading lower for a third straight session on Wednesday as traders continue to take profits following the Kiwi’s inability to smash through a key technical retracement level at .6567. The price action suggests bullish traders are willing to let the currency retreat into a value zone where they can regroup before taking another run at the resistance level and the last top at .6576. Essentially, given the uncertainty over the U.S.-China trade deal, traders are reluctant to buy strength at current price levels.
At 06:34 GMT, the NZD/USD is trading .6529, down 0.0017 or -0.25%.
Daily Technical Analysis
The main trend is up according to the daily swing chart. A trade through .6576 will signal a resumption of the uptrend. The main trend will change to down on a move through .6395. This is highly unlikely. However, there is room for a normal 50% to 61.8% retracement of the last rally.
The market is currently trading inside the longer-term retracement zone at .6497 to .6567.
The short-term range is .6395 to .6576. Its retracement zone at .6485 to .6464 is a value zone and primary downside target. Since the main trend is down, I expect to see buyers show up on a test of this area.
Daily Technical Forecast
Based on the early price action and the current price at .6529, 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 .6546.
A sustained move under .6546 will indicate the presence of sellers. The first downside target is a pair of Gann angles at .6516 and .6515. Watch for a technical bounce.
If .6515 fails as support then look for a break into the major 50% level at .6497, followed by the short-term 50% level at .6485.
A sustained move over .6546 will signal the return of buyers. If this move is able to generate enough upside momentum then we could see a rally into a Gann angle at .6561, the major Fibonacci level at .6567, a downtrending Gann angle at .6569 and the main top at .6576.
This article was originally posted on FX Empire
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