NZD/USD Forex Technical Analysis – Strengthens Over .6734, Weakens Under .6720

James Hyerczyk
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The New Zealand Dollar is trading slightly better on Tuesday on low pre-holiday volume as buyers continue to be driven by the prospect of a U.S.-China trade deal and the shedding of the safe-haven U.S. Dollar. The reduced chances of a Reserve Bank of New Zealand rate cut as well as rising business confidence, stronger-than-expected GDP data and increased infrastructure spending are also underpinning the Kiwi.

At 06:25 GMT, the NZD/USD is trading .6730, up 0.0002 or +0.03%.

Daily NZD/USD
Daily NZD/USD

Daily Technical Analysis

The main trend is up according to the daily swing chart. The uptrend continued earlier in the session when buyers took out yesterday’s high.

The main trend will change to down on a move through .6554. This is highly unlikely, but if enough sellers come in late in the session then look for a closing price reversal top. This won’t change the main trend to down, but if confirmed, it could trigger the start of a 2 to 3 day correction.

The main range is .6791 to .6204. Its 50% to 61.8% retracement zone at .6567 to .6497 is controlling the near-term direction of the NZD/USD. Consider it support.

Daily Technical Forecast

Based on the early price action and the current price at .6730, the direction of the NZD/USD the rest of the session on Tuesday is likely to be determined by trader to an uptrending Gann angle at .6734 and a downtrending Gann angle at .6720.

Bullish Scenario

A sustained move over .6734 will indicate the buying is getting stronger. This could eventually lead to a test of the July 19 main top at .6791. The Gann angle targets a test of this level on January 3.

Bearish Scenario

The inability to overcome .6734 will indicate the buying is getting weaker. A sustained move under .6720 will signal the presence of sellers. If this move creates enough downside momentum then look for a potential acceleration to the downside with the next target angles coming in at .6648 to .6644.

Side Notes

Given the prolonged move up in terms of price and time, a close under .6728 will form a closing price reversal top. If confirmed, this could lead to the start of a 2 to 3 day counter-trend break.

This article was originally posted on FX Empire

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