Yahoo Finance NZD/USD Forex Technical Analysis – Major Weekly Support at .6697 to .6633 Must Hold to Sustain Longer-Term Strength
The New Zealand Dollar finished lower last week as the two week rally lost steam due to the rising U.S. Dollar and concerns over the domestic economy. The rally in the U.S. Dollar was fueled by higher U.S. Treasury yields. They rose in reaction to reports that the U.S. and China had offered concessions during the recent trade negotiations in Beijing during the first week of January. Worries about this week’s New Zealand consumer inflation report also weighed on the currency.
Last week, the NZD/USD settled at .6744, down 0.0090 or -1.31%.
Weekly Technical Analysis
The main trend is up according to the weekly swing chart. However, momentum has been trending lower since the formation of the closing price reversal top at .6970 the week-ending December 7.
A trade through .6970 will signal a resumption of the uptrend. A move through .6591 will change the main trend to down.
The short-term range is .6970 to .6591. Its retracement zone at .6780 to .6852 provided resistance the last two weeks. The zone is controlling the upside momentum.
The main range is .6424 to .6970. Its retracement zone at .6697 to .6633 is the primary downside target. This zone could develop into new support. Since the main trend is up, buyers could come in on a test of this zone.
Weekly Technical Forecast
Based on last week’s price action and the close at .6744, the direction of the NZD/USD this week is likely to be determined by trader reaction to the 50% level at .6781.
Bullish Scenario
Overtaking .6781 will indicate the presence of buyers. If this move gains some traction then look for the rally to possibly extend into the Fibonacci level at .6825, followed by the downtrending angle at .6830. The buying will get stronger over .6830 with the next target last week’s high at .6850. This is a potential trigger point for an acceleration into the downtrending Gann angle at .6900.
Bearish Scenario
A sustained move under .6781 will signal the presence of sellers. The first target is a long-term uptrending Gann angle at .6724, followed by a short-term uptrending Gann angle at .6711 and the main 50% level at .6697.
Look for an acceleration to the downside if .6697 fails as support. This could trigger a break into another short-term uptrending Gann angle at .6651 and the Fibonacci level at .6633.
Basically, the weak starts with the NZD/USD trading between a pair of retracement zones. The tightest range is .6781 to .6697. The widest range is .6825 to .6633.
Look for volatility with the release of the New Zealand CPI data on Wednesday.
This article was originally posted on FX Empire
