NZD/USD Could Strengthen Over .6753, Weaken Under .6710

The New Zealand Dollar is trading at its highest level since January 21 on Tuesday after reversing earlier weakness. Despite reports that “the invasion of Ukraine has begun,” after Russian President Vladimir Putin announced Monday evening that he would recognize their independence, the risky currency is attracting buyers as investors seem to be expressing some kind of relief after weeks of waiting for the war to start.

At 11:11 GMT, the NZD/USD is trading .6737, up 0.0036 or +0.54%.

In other news, although traders are pondering what impact a possible war in Ukraine combined with rising commodity prices might have on the Reserve Bank of New Zealand’s policy decision on Wednesday, investors are still assuming a quarter-point hike to 1.0% is a done deal and, given high readings for local inflation, have priced in around a one-in-three risk of a half-point rise.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed earlier today when buyers took out .6734. A move through the new main bottom at .6680 will change the main trend to down.

The main range is .6891 to .6529. The NZD/USD is currently testing its retracement zone at .6710 to .6753. This area is controlling the near-term direction of the Forex pair.

The nearest support is a pivot at .6669. This will move up as the market moves higher. The main support range is .6637 to .6612. This zone will also move higher with the market.

Short-Term Outlook

Traders are waiting to see what happens if the Fibonacci level at .6753 is taken out. This level is counter-trend resistance and a potential trigger point for an acceleration to the upside.

If traders recognize .6753 as resistance then look for a pullback into the 50% level at .6710. This is followed by the main bottom at .6680.

If there is a sustained move over .6753 then look for a potential acceleration to the upside with .6811 the next likely target. The main top target comes in at .6891.