The New Zealand Dollar is inching lower early Wednesday after hitting a four month high the previous session. The currency is trading over 1.50% higher this week, mostly on a plunge in the U.S. Dollar. The greenback started to lose value on Monday following a weaker-than-expected ISM US Manufacturing Index report.
At 05:24 GMT, the NZD/USD is trading .6513, down 0.0007 or -0.11%.
The Kiwi was also supported after the nation’s terms of trade rose to their second highest level ever in the September quarter. Perhaps helping to cap the gains were doubts over a U.S.-China trade deal after President Trump said we may have to wait until after the 2020 U.S. presidential election to make a deal.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. A trade through .6395 will change the main trend to down.
The main range is .6791 to .6204. Its retracement zone at .6497 to .6567 is currently being tested. This zone is controlling the longer-term direction of the NZD/USD.
The minor range is .6588 to .6204. Its retracement zone at .6441 to .6396 is support.
The short-term range is .6204 to .6533. Its retracement zone at .6368 to .6329 is another potential support area.
Daily Swing Chart Technical Forecast
Based on yesterday’s price action and the current price at .6513, the direction of the NZD/USD the rest of the session on Wednesday is likely to be determined by trader reaction to the main 50% level at .6497.
A sustained move over .6497 will indicate the presence of buyers. Taking out yesterday’s high at .6533 will indicate the buying is getting stronger. This could trigger a surge into the main Fibonacci level at .6567. This is a potential trigger point for an acceleration to the upside. The daily chart indicates there is a lot room to the upside with .6791 the next major target.
A failure to hold .6497 will signal the return of sellers. If this creates enough downside momentum then look for the selling to possibly extend into the Fibonacci level at .6441.
The next major move by the NZD/USD will be determined by trader reaction to the major retracement zone at .6497 to .6567.
This article was originally posted on FX Empire
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