NZD/USD Early Tone Determined by Reaction to .6694
The New Zealand Dollar is down late in the session on Tuesday but well off its intraday low as traders prepared for Wednesday’s policy announcements from the U.S. Federal Reserve.
The Kiwi hit a multi-year low early in the session as a sell-off in global equity markets drove down demand for risky currencies. However, the currency rebounded throughout the session as the U.S. Dollar gave back its earlier gains.
At 21:40 GMT, the NZD/USD is trading .6688, down 0.0012 or -0.17%.
In other news, trader will get a chance to react to the latest report on Credit Card Spending, due to be released at 02:00 GMT. Later in the day, the Fed will release its latest monetary policy decisions at 19:00 GMT. It is expected to give guidance about the trajectory of monetary policy tightening, with investors expecting the first post-pandemic U.S. rate hike in March.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through .6660 will signal a resumption of the downtrend. A move through .6891 will change the main trend to up. The Kiwi is also in a position to post a potentially bullish closing price reversal bottom.
The first minor range is .6811 to .6660. Its 50% level or pivot at .6736 is the primary upside target. The second minor range is .6891 to .6660. Its pivot is the next target at .6776.
Daily Swing Chart Technical Forecast
The direction of the NZD/USD early Wednesday is likely to be determined by trader reaction to .6694.
A sustained move over .6694 will indicate the presence of buyers. Overcoming the previous main bottom at .6702 will indicate the buying is getting stronger. This could extend the rally into the first pivot at .6736.
A sustained move under .6694 will signal the presence of sellers. If this creates enough downside momentum then look for a possible retest of .6660.
Taking out .6660 will indicate the selling pressure is getting stronger with the November 2, 2020 main bottom at .6589 the next major downside target.