The New Zealand Dollar is inching higher on Friday on low holiday volume. Nonetheless, the move does constitute a follow-through to the upside, following yesterday’s strong rally. On Thursday, the Kiwi climbed against the greenback after surprisingly strong U.S. jobs numbers and a firm stock market. However, traders are a bit cautious about chasing the currency higher as another surge in U.S. coronavirus cases threatens to derail the economic recovery.
At 06:39 GMT, the NZD/USD is trading .6522, up 0.0012 or +0.18%.
Trading in the Kiwi on Friday may be subdued before the U.S. holiday, but analysts say sentiment favors more gains in the U.S. Dollar as investors turn cautious, Reuters reported.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. The uptrend was reaffirmed on Thursday when buyers took out the last main top at .6533. The main trend will change to down on a move through .6381.
The minor range is .6585 to .6381. Its 50% level or pivot at .6483 is controlling the near-term direction of the NZD/USD. Trading above this level is helping to generate an early upside bias on Friday.
The short-term range is .5921 to .6585. Its retracement zone at .6253 to .6175 is the major support area.
Daily Swing Chart Technical Forecast
Based on the early price action and the current price at .6522, the direction of the NZD/USD on Friday is likely to be determined by trader reaction to the minor 50% level at .6483.
A sustained move over .6483 will indicate the presence of buyers. Taking out yesterday’s high at .6537 will indicate the buying is getting stronger. If the volume were stronger, we’d probably see an acceleration into the main top at .6585.
A sustained move under .6483 will signal the presence of sellers. This could trigger a quick break into a minor pivot at .6461. This is followed by a series of main bottoms at .6385, .6383 and .6381.
This article was originally posted on FX Empire
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