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NZD/USD Forex Technical Analysis – Daily Trend Changes to Down on Trade Through .7175

James Hyerczyk
Updated

The New Zealand Dollar broke sharply on Wednesday, driven by the prospect of higher U.S. interest rates, lower demand for risky assets, falling commodities prices and bearish trade data which suggests the economy may be facing a significant headwind.

On Wednesday, the NZD/USD settled at .7208, down 0.0026 or -0.36%.

NZDUSD
Daily NZD/USD

Daily Technical Analysis

The main trend is still up according to the daily swing chart, however, momentum has been trending lower since the formation of the closing price reversal top at .7437 on February 16.

The main trend will change to down on a move through .7175. This could fuel the start of a steep sell-off since the next main bottom doesn’t come in until .6953.

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The short-term range is .7175 to .7437. Its retracement zone at .7275 to .7306 is new resistance. Trading below this zone is contributing to the downside bias.

The intermediate range is .6953 to .7437. Its retracement zone at .7195 to .7138 is the next downside target. This zone provided support at .7175 on February 8. We could see a technical bounce on the first test of this zone, but if it fails then look for the selling to continue into the main retracement zone.

The main range is .6780 to .7437. Its retracement zone at .7108 to .7031 is the primary downside target. This zone is also controlling the longer-term direction of the Forex pair.

Daily Technical Forecast

Based on the downside momentum into Wednesday’s close, traders are likely to drive the NZD/Usd into the intermediate 50% level at .7195. The bias will shift to the downside under this level. This should trigger a change in trend on a trade through .7175.

If .7175 fails then look for the break to extend into .7138, followed by .7108. The trigger point for an acceleration to the downside is .7108. Taking out this level with rising volume could trigger a further decline into .7031.

Holding above .7195 will indicate that buyers are coming in to defend the .7175 main bottom. If this move generates enough upside momentum then look for a possible rally into .7275 to .7306.

This article was originally posted on FX Empire

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