U.S. Markets close in 1 hr 17 mins

NZD/USD Forex Technical Analysis – May 21, 2019 Forecast

James Hyerczyk

Sellers are returning to the New Zealand Dollar after yesterday’s one day reprieve. The currency is being pressured by outside news today although the generally bearish tone in the market has been in place for months with the Reserve Bank of New Zealand (RBNZ) beginning its easing cycle with a rate cut on May 8.

At 04:08 GMT, the NZD/USD is trading .6518, down 0.0016 or -0.25%.

Today’s weakness is being fueled by comments from Reserve Bank of Australia (RBA) Governor Lowe who said in a speech at the Economic Society of Australia Business Lunch, in Brisbane early Tuesday, that he favored a rate cut.

Daily NZD/USD

Daily Technical Analysis

The main trend is down according to the daily swing chart. The main trend will change to up on a trade through .6686. This is highly unlikely at this time, which means the only likely way to stop the selling pressure is with a closing price reversal bottom.

A trade through .6513 will signal a continuation of the downtrend with the next major targets the October 16, 2018 main bottom at .6465 and the October 10, 2018 main bottom at .6424.

The minor trend is also down. A trade through .6584 will change the minor trend to up. This will also shift momentum to the upside.

Daily Technical Forecast

The NZD/USD is currently following three Gann angles lower. Each angle is moving down at a pace of 0.001 per day from a previous main top.

The long-term downtrending Gann angle is at .6509. The intermediate-term downtrending Gann angle is at .6524 and the short-term downtrending Gann angle is at .6536.

Based on the early price action and the current price at .6518, it’s safe to say that the intermediate downtrending angle at .6524 is acting like a pivot.

Look for the downtrend to continue at a pace of .001 per day as long as the NZD/USD remains under this level. Crossing to the weak side of the downtrending Gann angle at .6509 will indicate the selling pressure is getting stronger. This could trigger an eventual break into .6465 and .6424.

Overcoming .6524 will indicate the selling is getting weaker, but I’m not going to worry about the short side as long as the NZD/USD remains on the weak side of the upper downtrending Gann angle at .6536.

Overcoming and sustaining a move on the strong side of .6526 will signal the return of buyers. This could fuel a short-covering rally.

This article was originally posted on FX Empire

More From FXEMPIRE: