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NZD/USD Forex Technical Analysis – Trader Reaction to .7204 – .7266 Retracement Tone Set Near-Term Tone

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The New Zealand Dollar is trading lower on Thursday after giving up earlier gains despite a pair of economic reports indicating a strengthening economy.

The Kiwi Dollar rallied on Wednesday in reaction to better-than-expected labor market data and mixed reports from the U.S. on private sector jobs and the services industry.

At 05:15 GMT, the NZD/USD is trading .7206, down 0.0011 or -0.15%.

Early today, figures from Statistics New Zealand showed the number of new homes consented in the year ended March 2021 reached an all-time high of 41,028, due to an increase in consents for higher-density housing.

In other news, a preliminary reading of New Zealand ANZ business confidence improved to 7.0 in May, up from -2.0.

Daily NZD/USD
Daily NZD/USD

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through .7115 will signal a resumption of the downtrend. The main trend will change to up on a move through .7287.

The main range is .7465 to .6943. The NZD/USD is currently testing its retracement zone at .7204 to .7266. This zone is controlling the near-term direction of the Forex pair.

The short-term range is .6943 to .7287. Its retracement zone at .7115 to .7074 is potential support.

The main support is the long-term retracement zone at .7027 to .6924.

Daily Swing Chart Technical Forecast

The direction of the NZD/USD on Wednesday is likely to be determined by trader reaction to .7204.

Bullish Scenario

A sustained move over .7204 will indicate the presence of buyers. If this creates enough upside momentum then look for the rally to possibly extend into .7266, followed by .7287. The latter is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under .7204 will signal the presence of sellers. The first downside target is a minor pivot at .7172. If this level fails as support then look for the selling to possibly extend into .7115 to .7074.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

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