NZD/USD Forex Technical Analysis – .5958 is Potential Trigger Point for Acceleration to Downside

The New Zealand Dollar is under pressure on Thursday, following through to the downside following yesterday’s plunge. Helping to trigger the steep break was Reserve Bank of New Zealand Governor Adrian Orr who said negative interest rates were not off the table in the central bank’s response to the economic fallout of the coronavirus crisis.

At 07:31 GMT, the NZD/USD is trading .5973, down 0.0025 or -0.41%.

When asked by a parliamentary committee what other stimulus steps could be taken, Adrian Orr told lawmakers:  “At most we are the end of the beginning, around what may need to be done and what we can do. Likewise, negative interest rates are not ruled off the table…and there are other direct financing measures,” he added. The New Zealand Dollar dropped after the comments.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through the new swing top at .6131 will signal a resumption of the uptrend after the current two day setback. The main trend will change to down on a move through the last main bottom at .5844.

The main range is .6448 to .5469. The NZD/USD is currently testing its retracement zone at .5958 to .6074. This zone is controlling the near-term direction of the Forex pair.

The short-term range is .5469 to .6131. Its retracement zone at .5800 to .5722 is a potential support area.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at .5973, the direction of the NZD/USD the rest of the session on Thursday is likely to be determined by trader reaction to the main 50% level at .5958.

Bullish Scenario

A sustained move over .5958 will indicate the presence of buyers. If this move is able to generate enough upside momentum then look for the rally to possibly extend into the main Fibonacci level at .6074.

Overcoming .6074 will indicate the buying is getting stronger. This could lead to a test of the main top at .6131. This is a potential trigger point for an acceleration to the upside with the next major target coming in at .6448.

Bearish Scenario

A sustained move under .5958 will signal the presence of sellers. This is a potential trigger point for an acceleration into a main bottom at .5844, followed by the short-term retracement zone at .5800 to .5722.