NZD/USD Forex Technical Analysis – .6702 Main Bottom Potential Trigger Point for Acceleration into .6589

The New Zealand Dollar is under pressure late Monday as the rapid rise of coronavirus cases forced more restrictions in Europe and dimmed the outlook for global growth.

In economic news, consumer confidence in New Zealand dropped in the fourth quarter due to rising mortgage rates and ongoing concerns about the coronavirus and its variants, a survey showed on Monday.

At 20:35 GMT, the NZD/USD is trading .6715, down 0.0021 or -0.31%.

The Westpac-McDermott Miller Consumer Confidence Index fell to 99.1 from 102.7 in the previous quarter. A reading above 100 indicates more optimists than pessimists.

Many households have reported that their financial position has deteriorated over the past year, the survey said.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. It turned up late last week but the lack of follow-through to the upside indicates the move may have been fueled by short-covering and buy stops rather than new buying.

A trade through .6702 will change the main trend to down. A move through .6834 will reaffirm the uptrend.

The nearest resistance is a pair of 50% levels at .6768 and .6785. Overcoming this area will indicate that new buyers are coming in.

Daily Swing Chart Technical Forecast

The direction of the NZD/USD into the close is likely to be determined by trader reaction to .6736.

Bearish Scenario

A sustained move under .6736 will indicate the presence of sellers. If this creates enough downside momentum then look for a test of .6702.

Taking out .6702 will not only change the main trend to down, but it could also trigger an acceleration to the downside. The daily chart indicates there is no visible support until the November 2 main bottom at .6589.

Bullish Scenario

Overcoming and sustaining a move over .6736 will signal the presence of buyers. This could trigger a late session surge into .6768 and .6785.

A close over .6735 will form a closing price reversal bottom. If confirmed, this could trigger the start of a 2 to 3 day rally.