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NZD/USD Forex Technical Analysis – Minor Trend Changes to Down on Move Through .6584

The New Zealand Dollar is trading lower on Tuesday as risk aversion sweeps through the higher-yielding asset markets. With safe-haven U.S. Treasury bonds and the Japanese Yen trading higher, the price action suggests there is a culprit out there spooking investors.

Some traders thought mounting concerns over the coronavirus outbreak in China might be having an impact given the treat of contagion as hundreds of millions travel for the Lunar New Year holidays.

At 07:41 GMT, the NZD/USD is trading .6597, down 0.0015 or -0.23%.

Daily NZD/USD
Daily NZD/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .6554 will change the main trend to down. A move through .6756 will signal a resumption of the uptrend.

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The minor trend is up. It changed to up on January 16, however, the rally stalled at .6665, just below a 50% level. A trade through .6584 will change the minor trend to down. This will shift momentum to the downside.

The major range is .6791 to .6204. Its retracement zone at .6567 to .6497 is support. It is controlling the near-term direction of the NZD/USD.

The main range is .6204 to .6756. It retracement zone at .6567 to .6497 is another downside target. Combining the major and the main range makes .6497 to .6460 a key area to watch.

The minor range is .6584 to .6665. Its 50% level at .6625 is controlling the direction of the NZD/USD on Tuesday.

The short-term range is .6756 to .6584. Its retracement zone is .6670 to .6690. The rally stopped at .6605 last week just short of this area.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at .6597, the direction of the NZD/USD the rest of the session on Tuesday is likely to be determined by trader reaction to .6625.

Bearish Scenario

A sustained move under .6625 will indicate the presence of sellers. The next downside targets are .6584, .6567 and .6554.

The selling starts to open up to the downside under .6554 with other targets at .6523 and .6497.

Bullish Scenario

A sustained move over .6625 will signal the presence of buyers. If this creates enough upside momentum then look for the rally to possibly extend into .6665, .6670 and .6690.

This article was originally posted on FX Empire

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