The New Zealand Dollar is trading higher early Friday as investors continue to react to the news that Westpac Bank pared back its rate cut expectations, at least in the short-term. Market pricing for a rate cut in November fell sharply early Thursday when Westpac Bank chief economist Dominick Stephens said it was no longer expecting a cut.
At 03:18 GMT, the NZD/USD is trading .6437, up 0.0024 or +0.37%.
“The balance of recent domestic data does not justify a cut, global sentiment has improved and overseas central banks have indicated they will pause,” he said.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. The trade through .6436 earlier today reaffirmed the uptrend. A move through .6334 will change the main trend to down.
The short-term range is .6451 to .6204. Its retracement zone at .6357 to .6327 is support. This zone stopped the selling at .6334 on October 28.
The intermediate range is .6588 to .6204. Its retracement zone at .6396 to .6441 is currently being tested. This is the last retracement zone before the .6451 main top.
The main range is .6791 to .6204. Its retracement zone at .6498 to .6567 is the primary upside target. This zone is also controlling the longer-term direction of the market.
Daily Swing Chart Technical Forecast
Based on the early price action and the current price at .6437, the direction of the NZD/USD the rest of the session on Friday is likely to be determined by trader reaction to the intermediate Fibonacci level at .6441.
A sustained move over .6441 will indicate the presence of buyers. This could lead to a test of the next main top at .6451. If this move triggers enough upside momentum then look for a potential surge into the main 50% level at .6498.
A sustained move under .6441 will signal the presence of sellers. If this move creates enough downside momentum then look for a break into the intermediate 50% level at .6396. This is followed by the short-term Fibonacci level at .6357.
This article was originally posted on FX Empire
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