NZD/USD Forex Technical Analysis – Momentum Could Be Shifting to Downside – FX Empire

The New Zealand Dollar is inching higher on Tuesday after a steep sell-off the previous session was fueled by a jump in U.S. Treasury yields. Investors are also monitoring the price action in global equity markets, which has been the prominent driver of the price action in the Kiwi lately.

At 05:41 GMT, the NZD/USD is trading .6084, up 0.0010 or +0.16%.

Earlier in the session, the NZD/USD was pressured after Deputy Prime Minister and Foreign Minister Winston Peters stirred up China by saying he supports Taiwan’s inclusion in the World Health Organization. China is the largest trading partner of both Australia and New Zealand and NZ’s second-largest trading partner.

Volume is a little on the light side early Tuesday as investors prepare for Wednesday’s release of the latest Reserve Bank of New Zealand interest rate and monetary policy decisions.


Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, yesterday’s formation of a closing price reversal top and a new secondary lower top suggests momentum may be getting ready to shift to the downside. This could even lead to a change in trend to down.

A trade through .6156 and .6176 will signal a resumption of the downtrend. The main trend will change to down on a trade through the last main bottom at .5995.

The main range is .6448 to .5469. Its retracement zone at .6074 to .5958 is support. This zone is controlling the near-term direction of the Forex pair.

The short-term range is .5911 to .6176. Its 50% level at .6043 is also support. This zone stopped the selling earlier today.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at .6084, the direction of the NZD/USD the rest of the session on Tuesday is likely to be determined by trader reaction to the main Fibonacci level at .6074 and the short-term 50% level at .6043.

Bullish Scenario

A sustained move over .6074 will indicate the presence of buyers. If this is able to generate enough upside momentum then buyers could take out the main tops at .6156 and .6176. The latter is a potential trigger point for an acceleration to the upside with the March 9 top at .6448 the next potential upside target.

Bearish Scenario

A sustained move under .6043 will signal the presence of sellers. This could trigger a break into the last main bottom at .5995, followed by the main 50% level at .5958. This is a potential trigger point for an acceleration to the downside.

Side Notes

Essentially, the next major move by the NZD/USD will be determined by trader reaction to the main 50% to 61.8% area at .5958 to .6074. Trading between these levels will create a lot of noise, leading to a choppy, two-sided trade.

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