The New Zealand Dollar is inching higher early Wednesday but has actually been stuck in a range since January 9. Investors are showing little reaction to the signing of Phase One of the trade deal between the United States and China. The limited reaction actually seems to be one of caution.
However, perhaps helping to keep a lid on prices is a report from Bloomberg that mentioned the limited amount of tariff rollbacks that are contained in this deal. Furthermore, U.S. Treasury Secretary Steven Mnuchin said existing tariffs on Chinese goods would stay, pending further talks.
At 06:58 GMT, the NZD/USD is trading .6616, up 0.0002 or +0.03%
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 .6600 will indicate the selling pressure is getting stronger. The main trend changes to down on a move through .6554.
The major support zone is .6567 to .6497. The last two main bottoms at .6554 and .6522 fall inside this zone.
The intermediate range is .6554 to .6758. Its retracement zone at .6632 to .6656 has been providing resistance this week.
The short-term range is .6758 to .6600. Its retracement zone at .6679 to .6698 is another potential resistance area.
Daily Swing Chart Technical Forecast
Based on the price action this week and the current price at .6616, the direction of the NZD/USD the rest of the session on Wednesday 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 creates enough upside momentum then look for a surge into .6656. Overtaking this level could lead to a test of .6679, followed by .6698.
The inability to overcome .6632 will signal the presence of sellers. The first downside target is .6600. If this level fails then look for the selling to possibly extend into the major Fibonacci level at .6567, followed closely by the main bottom at .6554.
This article was originally posted on FX Empire
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