The New Zealand Dollar hit a four-year low early Tuesday in reaction to a strong U.S. Dollar and another weak business survey. Optimism over U.S.-China trade relations continued to underpin the U.S. Dollar, which hit multi-year highs against a basket of currencies. Additionally, a private sector gauge dropped to a multi-year low, driving the Kiwi lower.
At 03:00 GMT, the NZD/USD is trading .6240, down 0.0024 or -0.39%.
In domestic news, a third quarter Business Confidence report from the New Zealand Institute of Economic Research (NZIER) came in at -40%, well below the previously reported -34%. This was also below the historical low of -35%, reported in April 2009.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. The trade through the previous main bottom at .6255 signaled a resumption of the downtrend. The main trend will change to up on a trade through .6349.
Daily Swing Chart Technical Forecast
Based on the early price action and the current price at .6240, the direction of the NZD/USD is likely to be determined by trader reaction to a potential Gann angle resistance cluster at .6269 to .6271.
A sustained move under .6269 will indicate the presence of sellers. If this move continues to generate enough downside momentum then look for a break into the August 24, 2015 main bottom at .6207.
Overtaking and sustaining a rally over .6271 will signal the return of buyers. This will also put the NZD/USD in a position to form a closing price reversal bottom.
If this move create enough upside momentum then look for the rally to possibly extend into a downtrending Gann angle at .6309. This is the last potential resistance angle before the .6349 main top.
This article was originally posted on FX Empire
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