The New Zealand Dollar finished slightly better on Friday after recovering from an early session setback. Initially, the Kiwi was driven lower by increased demand for the safe-haven greenback as investors responded to renewed concerns about the surge in coronavirus infections in the United States and around the world.
The currency rebounded, however, as the U.S. Dollar lost its safe-haven allure on hopes of a potential vaccine for the novel coronavirus. That news helped drive up demand for higher-risk assets while pushing the U.S. Dollar lower.
On Friday, the NZD/USD settled at .6571, up 0.0002 or +0.03%.
The story that shifted sentiment on Friday was the news that Gilead Sciences said additional data from a late-stage study showed its antiviral remdesivir reduced the risk of death and significantly improved the conditions of severely ill COVID-19 patients.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart, however, the closing price reversal top at .6600 on July 9 suggests that momentum could shift to the downside. A trade through .6600 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down if sellers take out the nearest swing bottom at .6385.
The minor trend is also up. A trade through .6519 will change the minor trend to down. This will confirm the shift in momentum.
The short-term range is .6381 to .6600. If the minor trend changes to down then its retracement zone at .6490 to .6465 will become the primary target zone.
Demand for risk is likely to continue to set the tone. Risk sentiment will be lifted if scientists continue to make progress toward a coronavirus vaccine, However, investors will continue to weight this evidence against the rapid-rising cases of coronavirus around the world.
On the upside, taking out .6600 should lead to a test of the January 24 main top at .6629. This is a potential trigger point for an acceleration to the upside since the next major target is way up at .6756.
On the downside, a pullback to .6490 to .6465 will represent a normal correction. However, longs will start getting nervous if .6465 fails as support.
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This article was originally posted on FX Empire
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