NZD/USD Forex Technical Analysis – Traders May Try to Build Support Base Inside .6924 – .7027 Retracement Zone
The New Zealand Dollar is edging higher on Friday, but the move isn’t even close to being enough to erase this week’s steep losses fueled as traders gave up on the chance of early rate hikes and pulled bond yields sharply lower.
The Kiwi has been plunging since New Zealand decided to cool a red-hot housing market by ending tax breaks for property investors, a shift that forced speculators to sharply scale back wagers on an early hike in rates.
At 07:02 GMT, the NZD/USD is trading .6977, up 0.0025 or +0.36%.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through .6943 will signal a resumption of the downtrend. The main trend will change to up on a trade through .7270.
The main range is .6589 to .7465. The NZD/USD is currently trading inside its retracement zone at .7027 to .6924. This range is controlling the near-term direction of the Forex pair.
The minor range is .7270 to .6943. Its 50% level at .7107 is the next likely upside target level.
Daily Swing Chart Technical Forecast
The direction of the NZD/USD is currently being driven by strong downside momentum. A trade through yesterday’s high at .6986 will be the first sign that momentum may be getting ready to shift to the upside.
Bullish Scenario
A sustained move over .6986 will indicate the presence of buyers. This could be aggressive counter-trend buying or short-covering. If it creates enough upside momentum then look for the rally to possibly extend into the main 50% level at .7027. Since the main trend is down, sellers could come in on the first test of this level.
Bearish Scenario
A sustained move under .6986 will signal the presence of sellers. Taking out .6943 will signal a resumption of the downtrend with potential targets the main Fibonacci level at .6924, followed by the November 23, 2020 main bottom at .6897.
Taking out .6897 could trigger an acceleration to the downside with the November 13 main bottom at .6811 the next likely downside target.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
More From FXEMPIRE:
U.S. Dollar Index (DX) Futures Technical Analysis – Trade Through 92.940 Targets 93.135 Main Top
Economic Data Puts the EUR, the Pound, and the U.S Dollar in the Spotlight
Darden Restaurants Tops Earnings Estimates, Shares Gain Over 8%
AUD/USD Daily Forecast – Australian Dollar Moves Higher As Commodity Markets Rebound
European Equities: German Business Sentiment and COVID-19 News in Focus
