NZD/USD Bulls Eyeing .6874 for Upside Breakout

Rising risk sentiment and bets on more aggressive tightening from the Reserve Bank of New Zealand (RBNZ) are helping to underpin the New Zealand Dollar on Thursday. The move is being supported by the swaps market which is implying an 85% chance of a half-point rise to 1.5% in April. Futures market traders also see rates at 1.75% by May and 2.0% by July.

At 09:15 GMT, the NZD/USD is trading .6848, up 0.0008 or +0.11%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending lower since the formation of the closing price reversal top on March 7.

A trade through .6926 will negate the reversal top and signal a resumption of the uptrend. A move through .6631 will change the main trend to down.

The minor trend is also up. A trade through the minor bottom at .6796 will shift momentum to the downside.

On the upside, the nearest resistance is a minor pivot at .6861. This is followed by a major 50% level at .6874 and a major Fibonacci level at .6955.

On the downside, the minor pivot at .6778 is support. This is followed by the short-term retracement zone at .6727 to .6681.

Daily Swing Chart Technical Forecast

The direction of the NZD/USD on Thursday is likely to be determined by trader reaction to .6861 and .6874.

Bearish Scenario

A sustained move under .6861 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into .6796, followed closely by .6778.

The pivot at .6778 is a potential trigger point for an acceleration to the downside with .6727 to .6681 the next major downside target.

Bullish Scenario

A sustained move over .6874 will signal the presence of buyers. This could trigger an acceleration to the upside with .6926 the next target, followed by the major Fibonacci level at .6955.