The New Zealand Dollar is strengthening against the U.S. Dollar on Thursday, following through on the move from the previous session that reversed earlier losses. The currency is likely being supported by hopes the U.S.-China trade deal, signed on Wednesday, could herald warmer relations between the world’s biggest economies and help to revive global growth.
At 06:31 GMT, the NZD/USD is trading .6628, up 0.0010 or +0.15%.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. However, momentum has been trending lower since December 31. A trade through .6554 will change the main trend to down.
A move through .6758 will signal a resumption of the uptrend. This is highly unlikely on Thursday, but the closing price reversal bottom on January 15 and its subsequent confirmation earlier today, may have signaled the start of a minimum 2 to 3 day rally or a 50% to 61.8% retracement of the break from .6758 to .6584.
The major support is a long-term retracement zone at .6567 to .6497.
The intermediate range is .6554 to .6758. Its retracement zone comes in at .6632 to .6656. The lower level of this zone is currently being tested.
The short-term range is .6758 to .6584. Its retracement zone at .6671 to .6692 is another potential upside target. Trader reaction to this zone could determine the near-term direction of the NZD/USD.
Daily Swing Chart Technical Forecast
Based on the early price action and the current price at .6628, the direction of the NZD/USD the rest of the session on Thursday is likely to be determined by trader reaction to the intermediate Fibonacci level at .6632.
A sustained move over .6632 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into the intermediate 50% level at .6656.
Overcoming .6656 will indicate the buying is getting stronger. This could trigger a further rally into the short-term retracement zone at .6671 to .6692.
A sustained move under .6632 will signal the presence of sellers. The first downside target is a minor 50% level at .6611. If this level fails to attract buyers then look for the selling to possibly extend into the minor bottom at .6584, followed by the major Fibonacci level at .6567 and the main bottom at .6554.
This article was originally posted on FX Empire