The New Zealand Dollar is edging lower on Monday, pressured by concerns over the coronavirus’ impact on the country’s economic growth after a high-ranking government official lowered the country’s GDP forecast. Trading volume is well-below average with the United States on a bank holiday.
New Zealand’s Prime Minister Jacinda Ardern lowered her country’s gross domestic product (GDP) growth forecast range to nearly 2%-2.5% this year due to the economic impact of the coronavirus outbreak.
It came in below the previous prediction of GDP growth of 2.2% to 2.8%. She said the impact will be seen in the first two quarters of the year.
At 09:38 GMT, the NZD/USD is trading .6435, up 0.0001 or +0.001.
Daily Technical Analysis
The main trend is down according to the daily swing chart. A trade through .6503 will change the main trend to up. A move through .6378 will signal a resumption of the downtrend.
The NZD/USD is currently trading inside a major retracement zone at .6481 to .6416. On the upside, another major retracement zone at .6498 to .6567 is resistance. This area is controlling the longer-term direction of the Forex pair.
The short-term range is .6503 to .6378. Its retracement zone at .6441 to .6455 is controlling the near-term direction of the NZD/USD.
Daily Technical Forecast
Based on the early price action and the current price at .6435, the direction of the NZD/USD the rest of the session on Monday is likely to be determined by trader reaction to the short-term 50% level at .6441.
A sustained move under .6441 will indicate the presence of sellers. If this creates enough downside momentum then look for a break into an uptrending Gann angle at .6418, followed closely by a major Fibonacci level at .6416.
If .6416 fails as support then look for the selling to possibly extend into the next uptrending Gann angle at .6398. This is the last potential support angle before the .6378 main bottom.
A sustained move over .6441 will signal the presence of buyers. The first upside target is the short-term Fibonacci level at .6455. Sellers could come in on the first test of this level. Overtaking it, however, could trigger a rally into the major downtrending Gann angle at .6469.
The downtrending Gann angle at .6469 has been guiding the NZD/USD lower since the .6629 main top on January 24.
This article was originally posted on FX Empire