Yahoo Finance NZD/USD Forex Technical Analysis – Breakout Over .6723 Targets .6803
The New Zealand Dollar finished higher last week. The currency was supported by stronger-than-expected retail sales data and a better-than-expected trade balance report. Prices surged on Friday following a drop in the U.S. Dollar, which was fueled by comments from Fed Chair Jerome Powell, who suggested the central bank is getting close to normalizing interest rates.
For the week, the NZD/USD settled at .6690, up 0.0055 or +0.83%.
Weekly Technical Analysis
The main trend is down according to the weekly swing chart. However, momentum has been trending higher since the formation of the weekly closing price reversal bottom at .6544 the week-ending August 17 and the subsequent confirmation of the chart pattern last week.
The minor trend is also down. The new minor bottom is .6544. A pair of minor tops come in at .6851 and .6859. A trade through these tops will change the minor trend to up. This will also shift momentum to the upside.
The main trend changes to up on a trade through .7061. A trade through .6544 will negate the chart pattern and signal a resumption of the downtrend.
The major long-term retracement zone at .6723 to .6883 is resistance. Inside this retracement zone is the main 50% to 61.8% zone at .6803 to .6864.
Weekly Technical Forecast
Based on last week’s price action and the close at .6690, the direction of the NZD/USD is likely to be determined by trader reaction to the major Fibonacci level at .6723.
A sustained move under .6723 will indicate the presence of sellers. If this move generates enough downside momentum then look for a possible pullback into a long-term uptrending Gann angle at .6600. This is followed by a downtrending Gann angle at .6581.
Crossing to the weak side of the angle at .6581 will put the NZD/USD in a bearish position. This could lead to a test of the minor bottom at .6544.
A sustained move over .6723 will signal the presence of buyers. This could trigger an acceleration to the upside with the next target the 50% level at .6803, followed by a downtrending Gann angle at .6821.
Overtaking .6821 will indicate the buying is getting stronger. This could spike the market into a potential resistance cluster including minor tops at .6851 and .6859, and a Fib level at .6864 and a 50% level at .6883.
This article was originally posted on FX Empire
